Problem 5-19A (Algo) Target pricing and target costing with ABC LO 5-3 Campbell Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Campbell uses an activity-based costing system. The following are the relevant cost data for the previous month: nts Direct Cost per Model ZM Model DS Unit ook Direct materials $20.30 $10.30 Direct labor 28.60 12.60 Ask eferences Estimated Cost s 24,000 46,000 87,500 Cost Driver Use of Cost Driver Category Unit level Number of units Number of setups ZM: 2,450 units; DS: 9,550 units Batch level Product level ZM: 25 setups; DS: 25 setups ZM: 15; DS: 10 ZM: 500 hours; DS: 1,000 hours Number of TV commercials Number of machine hours Facility level 270,000 $427,500 Total Campbell's facility has the capacity to operate 4,500 machine hours per month Required a. Compute the cost per unit for each product b. The current market price for products comparable to Model ZM is $129 and for DS is $91. If Campbell sold all market prices, what was its profit or loss for the previous month? c. A market expert believes that Campbell can sell as many cameras as it can produce by pricing Model ZM at $124 and Model DS at $44. Campbell would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? its products at the 4 the target cost for each product? Complete this question by entering your answers in the tabs below. Required A Required C Required B Compute the cost per unit for each product. (Round intermediate calcu lations and final answers to 2 decimal places.) Direct Materials Direct Labor Allocated Overhead Type of Product Total Model ZM Model DS Required B Required A II Complete this question by entering your answers in the tabs below. Required A Required B Required C The current market price for products comparable to Model ZM is $129 and for DS is $91. If Campbell sold all of its products at the market prices, what was its profit or loss for the previous month? (Round intermediate calculations to 2 decimal places Loss amounts should be indicated by a minus sign.) Amount Model ZM Model DS Required A Required C> Complete this question by entering your answers in the tabs below. Required A Required C Required B A market expert believes that Campbell can sell as many cameras as it can produce by pricing Model ZM at $124 and Model DS at $44. Campbell would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product? (Round your answers to 2 decimal places.) Model ZM Model DS Target cost/unit Required B Required C>
