Target Costing at Apple

• Values:
  • Market Price of Product: $1,200
  • Desired Profit Margin: 25%
  • Target Cost per Unit: $900
  • Current Cost per Unit: $950

• Requirements:
  1. Calculate the target cost gap for Apple.
  2. Discuss the role of target costing in product pricing.
  3. Analyze the factors influencing the target cost per unit.
  4. Recommend cost reduction strategies to achieve the target cost.