Hostetter Corporation Would Like to Use Target Costing for a New

Multiple Choice

Hostetter Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $30 per unit, management projects sales of 30,000 units. The new product would require an investment of $200,000. The desired return on investment is 13%. The target cost per unit is closest to:

A) $32.92
B) $30.00
C) $33.90
D) $29.13