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Please show work in excel :) Newbie, Inc. is considering producing a new line of shoes. Management will not begin production of a new product
Please show work in excel :)
Newbie, Inc. is considering producing a new line of shoes. Management will not begin production of a new product line unless they are able to obtain a gross margin of 30% on the product over its life cycle. The information relating to the new product line follows: The company's engineering department estimates that product cost per unit will be $6.75. Fixed overhead is expected to be $42,000 per year. There are no estimated selling costs. Required: 1) Estimate the target cost for the new product line. 2) Compare the estimated production cost to the target cost. Discuss this comparison. 3) Should the company begin production of the new product line? Why or why not? ExplainStep by Step Solution
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