Required information Problem 15-42 Target Costing; Selection of Product Features (LO 15-5, 15-8) [The following information applies to the questions displayed below.] Danish Furniture (DF) manufactures easy-to-assemble wooden furniture for home and office. The firm is considering modification of a table to make it more attractive to individuals and businesses that buy office products through online retailers. The table is small, can be used to hold a computer printer or fax machine, and has several shelves for storage. The company's marketing department surveyed potential buyers of the table regarding five proposed modifications. The 200 survey participants were asked to evaluate the modifications by using a five-point scale that ranged from 1 (strongly disagree) to 5 (strongly agree). Their responses, along with DF's related unit costs for the modifications, follow. The table currently costs $64 to produce and distribute, and DF's selling price for this unit averages $80. An analysis of competitive tables in the marketplace revealed a variety of features, with some models having all of the features that DF is considering and other models having only a few. The current manufacturers' selling prices for these tables averages $95. roblem 15-42 Part 1 equired: There is a need in target costing to: (You may select more than one answer. Single click the box with the question mark to roduce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. ny boxes left with a question mark will be automatically graded as incorrect.) Required: 1. There is a need in target costing to: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) increase the cost of production. have a marketing team become involved with product design. focus on the customer. increase the selling price. Problem 15-42 Part 2 3. Management desires to earn approximately the same rate of profit on sales that is being earned with the current design. a. If DF uses target costing and desires to meet the current competitive selling price, what is the maximum cost of the modified tab b. Which of the five modifications should DF consider? Complete this question by entering your answers in the tabs below. If DF uses target costing and desires to meet the current competitive selling price, what is the maximum cost of the modified table? 3. Management desires to earn approximately the same rate of profit on sales that is being earned with the current design. a. If DF uses target costing and desires to meet the current competitive selling price, what is the maximum cost of the modified table b. Which of the five modifications should DF consider? Complete this question by entering your answers in the tabs below. Which of the five modifications should DF consider? (Select "Yes" if DF should consider the modification, and "No" if it is not considered.)
