Question 1

Hepler Corporation would like to use target costing for a new product that is under consideration. At a selling price of $76 per unit, management projects sales of 50,000 units. The new product would require an investment of $400,000. The desired return on investment is 12%.
Required:
Determine the target cost per unit for the new product.

Accepted Answer

The answer of Hepler Corporation would like to use target...

Question 2

Management of Daubert Corporation is considering a new product, an outdoor speaker that would have a selling price of $43 per unit and projected sales of 60,000 units. Launching the new product would require an investment of $300,000. The desired return on investment is 13%.
Required:
Determine the target cost per unit for the outdoor speaker.

Accepted Answer

The answer of Management of Daubert Corporation is considering a...

Quiz 1: Pricing Products and Services