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Please Help!! I had gotten $6.72 for Req A,$5.88 for Req B, and $8992 for Rec C and they were all wrong. Exercise 19.5 (Static)
Please Help!! I had gotten $6.72 for Req A,$5.88 for Req B, and $8992 for Rec C and they were all wrong.
Exercise 19.5 (Static) Target Costing (L019-4, LO19-5) Expo Lube is interested in producing and selling an industrial line of oil filters, Market research indicates that wholesale customers are currently willing to pay $8 for similar filters, and thot Expo Lube could sell 80.000 units per year at that price It Expo Lube requires a 20 percent return on soles, what is its target cost for the proposed industrial line of filters? b. Assume that market research reveals several of Expo Lube's direct competitors are likely to lower the wholesale price of similar filters to $7 per unit. To remain competitive, who will Expo Lube's target cost have to be to maintain a 20 percent return on sales? c. At a wholesale pnce of S7, Expo Lube estimates that it can sell 88,000 industrial filters per year instead of 80,000 units. Assuming its target costs are attainable, how much more or less profit per year will the company earn or the $7 wholesale price compared to the Initial wholesale price estimate of $8? Complete this question by entering your answers in the tabs below. Required Required Required If Expo lube requires a 20 percent return on sales, what is its target cost for the proposed industrial line of filters? (Do not round your intermediate values, Round your answer to 2 decimal places) Target cont Required B > Step by Step Solution
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