The management of Rademacher Corporation is considering introducing a new product--a compact lawn blower. At a selling price of $24 per unit, management projects sales of 30,000 units. The lawn blower would require an investment of $200,000. The desired return on investment is 12%.The desired profit according to the target costing calculations is:
A) $696,000
B) $24,000
C) $86,400
D) $720,000

Question

Quizplus · Accepted Answer

The desired profit is calculated as 12% of the investment of $200,000, which equals $24,000.

The Management of Rademacher Corporation Is Considering Introducing a New