Target costing

Basic Motor Corporation uses target costing. Ass$$me that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $$23,600.$ Assume further that the QuikCar's total unit cost for the upcoming model year is estimated to be $$19,700$ and that Basic requires a $20\%$ profit margin on selling price $($which is equivalent to a $25\%$ markup on total cost$).$

a$.$ What price will Basic establish for the QuikCar for the upcoming model year?

b$.\text{'}$ Since the estimated manufacturing cost profit objectives.

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a$.$ What dictates the price?

b$.$ Compare desired profit with estimate price.