Tom Gilgen is considering the production of a new line of jeans. Based on preliminary market research, management has decided that each pair of jeans should be priced at $170. Furthermore, management believes that the profit margin should be 25 percent of sales revenue.

What is the target cost?

		$ 62.00
		$950.75
		$112.00
		$127.50

Bosworth Boots, Inc. is considering the production of a new line of boots. Based on preliminary market research, management has decided that each pair of boots should be priced at $225. Furthermore, management believes that the profit margin should be 30 percent of sales revenue.

What is the target cost?

		$150.75
		$225.50
		$260.00
		$157.50

Assume that the standard cost to make one unit of product includes 15 pounds of raw materials at a price of $3 per unit. In July, 34,000 pounds of raw materials were purchased for $100,800, and 30,600 pounds of raw materials were used to produce 2,000 units of finished product.

What is the materials quantity variance?

		$2,400 (U)
		$1,800 (U)
		$1,200 (F)
		$1,200 (U)