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 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 | $ | 1,400 | ||
| Annual demand | 91,000 | units | ||
| Life cycle | 4 | years | ||
| Target profit | 28 | % 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 14 percent return on sales.\
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 14 percent return on sales.
|
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Advances In Accounting Education Teaching And Curriculum Innovations Volume 23
Authors: Thomas G. Calderon
1st Edition
1789733944, 978-1789733945
