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Riverbed Company makes swimsuits and sells these suits directly to retailers. Although Riverbed has a variety of suits, it does not make the Performance suit
Riverbed Company makes swimsuits and sells these suits directly to retailers. Although Riverbed has a variety of suits, it does not make the Performance suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of sult. The department indicates that the Performance suit would sell for approximately $100. Given its experience, Riverbed believes the Performance suit would have the following manufacturing costs. Direct materials Direct labor $25 27 Manufacturing overhead 48 Total costs o $100 Assume that Riverbed uses cost-plus pricing, setting the selling price 24% above its costs. What would be the price charged for the Performance swimsuit? Selling price Assume that Riverbed uses target costing. What is the price that Riverbed would charge the retailer for the Performance swimsuit? Selling price $ eTextbook and Media What is the highest acceptable manufacturing cost Riverbed would be willing to incur to produce the Performance swimsuit, if it desired a profit of $24 per unit? (Assume target costing) Target cost
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