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Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
Edition 2ISBN: 978-0077274993 Exercise 26
Target Costing and Pricing
Sid's Skins makes a variety of covers for electronic organizers and portable music players. The company's designers have discovered a market for a new clear plastic covering with college logos for a popular music player. Market research indicates that a cover like this would sell well in the market priced at $15. Sid desires an operating profit of 20 percent of costs.
Required
What is the highest acceptable manufacturing cost for which Sid's would be willing to produce the cover
Sid's Skins makes a variety of covers for electronic organizers and portable music players. The company's designers have discovered a market for a new clear plastic covering with college logos for a popular music player. Market research indicates that a cover like this would sell well in the market priced at $15. Sid desires an operating profit of 20 percent of costs.
Required
What is the highest acceptable manufacturing cost for which Sid's would be willing to produce the cover
Explanation
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Target costing is price-based costing ra...
Fundamentals of Cost Accounting 2nd Edition by William Lanen, Carolyn Wells, Michael Maher
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