Question
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following
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 Annual demand Life cycle Target profit $2,300 86,000 units 4 years 21 percentage return on sales Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 42 percent return on sales. 3. Compute the target cost if Majesty wants a 12 percent return on sales. 1. Target Cost 2. Target Cost 3. Target Cost
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