The management of Fanton Corporation is considering introducing a new product-a compact lawn blower. At a selling price of $38 per unit, management projects sales of 60,000 units. The lawn blower would require an investment of $500,000. The desired return on investment is 18%.
-The desired profit according to the target costing calculations is:
A) $410,400
B) $2,190,000
C) $2,280,000
D) $90,000

Question

Quizplus · Accepted Answer

The desired profit is calculated as the desired return on investment (18%) multiplied by the investment ($500,000), which equals $90,000.

The Management of Fanton Corporation Is Considering Introducing a New