Target Costing at Google

• Values:
  • Market Price of Product: $900
  • Desired Profit Margin: 18%
  • Target Cost per Unit: $738
  • Current Cost per Unit: $800
• Requirements:

1. Calculate the target cost gap for Google.
2. Discuss the role of target costing in product pricing and profitability strategies.
3. Analyze the factors influencing the target cost per unit.
4. Recommend cost reduction strategies to achieve the target cost at Google.