Toyota Motor Corporation uses target costing. Assume that Toyota marketing personnel estimate that the competitive selling price for the Camry in the upcoming model year will need to be $27,000. Assume further that the Camry's total unit cost for the upcoming model year is estimated to be $22,500 and that Toyota requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost).

a. What price will Toyota establish for the Camry for the upcoming model year? $

b) Since the estimated manufacturing cost (exceeds/or is less than) the target cost, Toyota (May increase/must reduce) its total costs to maintain competitive pricing within its profit objectives.