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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:
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 1,900 96,000 units 5 years 24% return on sales Required: 1. Compute the target cost of this product. Target Cost 2. Compute the target cost if Majesty wants a 41 percent return on sales. Target Cost 3. Compute the target cost if Majesty wants a 11 percent return on sales. Target Cost
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