Question
Way Over Par Inc manufactures and sells portable golf driving nets. They are considering using Target Costing for Target Pricing or Cost Plus Pricing and
Way Over Par Inc manufactures and sells portable golf driving nets. They are considering using Target Costing for Target Pricing or Cost Plus Pricing and would like you to present the information necessary for them to make a decision.
A. Based on a target selling price of $500 per unit, sales of 1,000 units, and a target operating income of $60 per unit (a 20% return on a $300,000 investment), what is the cost per unit they must achieve?
B. Based on a Cost Plus strategy, using $400 as the total cost per unit and a 50% markup on cost, what amount per unit should the Company sell its product for?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started