Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates:

Estimated market price	$	1,500
Annual demand		100,000	units
Life cycle		3	years
Target profit		23	% return on sales

Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 40 percent return on sales. 3. Compute the target cost if Majesty wants a 12 percent return on sales.