Target Costing

Oregon Equipment Company wants to develop a new log$-$splitting machine for rural homeowners. Market research has determined that the

company could sell $5,000$ log$-$splitting machines per year at a retail price of $$700$ each. An independent catalog company would handle sales for an

annual fee of $$1,000$ plus $$30$ per unit sold. The cost of the raw materials required to produce the log$-$splitting machines amounts to $$70$ per unit.

If company management desires a return equal to $10$ percent of the final selling price, what is the target conversion and administrative cost per

unit? Hint: The target unit cost will only or should only include conversion costs and remaining or additional sales and administrative costs.

Round answer to two decimal places.