Turnhilm, Incorporated is considering adding a small electric mower to its product line. Management believes that in order to be competitive, the mower cannot be priced above $139. The company requires a minimum return of 25% on its investments. Launching the new product would require an investment of $8,000,000. Sales are expected to be 40,000 units of the mower per year.Required:Compute the target cost of a mower.

Question

Quizplus · Accepted Answer

The Answer of Turnhilm, Incorporated is considering adding a small electric mower to its product line. Management believes that in order to be competitive, the mower cannot be priced above $139. The company requires a minimum return of 25% on its investments. Launching the new product would require an investment of $8,000,000. Sales are expected to be 40,000 units of the mower per year.Required:Compute the target cost of a mower.

Turnhilm, Incorporated Is Considering Adding a Small Electric Mower to Its