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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:

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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 prices Annual demand Life cycle Target profit 1,700 93,000 units 6 years 29% return on sales Required: 1. Compute the target cost of this product 2. Compute the target cost if Majesty wants a 41 percent return on sales, 3. Compute the target cost if Majesty wants a 5 percent return on sales

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