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Q10. McGill Pty Ltd (McGill) has decided to adopt the target-costing approach for all new products. The following data for a new product has been
Q10. McGill Pty Ltd (McGill) has decided to adopt the target-costing approach for all new products. The following data for a new product has been made available by the company's design department: 100 000 $300.00 20% Forecast annual sales volume (in units) Target selling price per unit Desired profit margin per unit as a percentage of selling price Expected standard cost per unit $260.00 For McGill's to achieve the desired profit margin per unit, what reduction in per unit cost will the design department need to achieve through the value engineering process? A) $20 B) $40 c) $52 D) $60 Enter correct choice & provide justification for your choice in the space box below (2 marks)
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