Homework Answers
Target cost = Selling price-Desired profit
a) Target cost = 1900-(1900*24%) = 1444
b) Target cost = 1900-(1900*41%) = 1121
c) Target cost = 1900-(1900*11%) = 1691
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Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: $ 1,300 96,000 units Estimated market price Annual demand Life cycle Target profit 4 years 23% return on sales Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 40 percent return on sales. 3. Compute the target cost if Majesty wants a 9 percent return on...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: Estimated market price $ 1,100 Annual demand 88,000 units Life cycle 6 years Target profit 22 % return on sales Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 41 percent return on sales. 3. Compute the target cost if Majesty wants a 13 percent return...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: $ Estimated market price Annual demand Life cycle Target profit 2,600 88,000 units 5 years 21% return on sales Required: 1. Compute the target cost of this product. Target Cost 2. Compute the target cost if Majesty wants a 41 percent return on sales. Target Cost 3. Compute the target cost if Majesty wants a...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: $ Estimated market price Annual demand Life cycle Target profit 1.200 100,000 units 5 years 30% return on sales Required: 1. Compute the target cost of this product. Target Cost 2. Compute the target cost if Majesty wants a 40 percent return on sales. Target Cost 3. Compute the target cost if Majesty wants a...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: Estimated market price $ Annual demand Life cycle Target profit 1,100 85,000 units 4 years 24% return on sales Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 42 percent return on sales. 3. Compute the target cost if Majesty wants a 5 percent return on...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: Estimated market price $ 1,400 Annual demand 91,000 units Life cycle 4 years Target profit 28 % return on sales Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 40 percent return on sales. 3. Compute the target cost if Majesty wants a 14 percent return...
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Accola Company uses activity-based costing. The company has two products: A and B. The annual production...
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Paragon Corporation has an aggressive research and development (R&D) program and uses target costing to aid in the final decision to release new products to production. A new product is being evaluated. Market research has surveyed the potential market for this product and believes that its unique features will generate a total demand of 40,000 units at an average price of $250. Design and production engineering departments have performed a value analysis of the product and have determined that the...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: $ 1,300 96,000 units Estimated market price Annual demand Life cycle Target profit 4 years 23% return on sales Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 40 percent return on sales. 3. Compute the target cost if Majesty wants a 9 percent return on...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: $ Estimated market price Annual demand Life cycle Target profit 2,600 88,000 units 5 years 21% return on sales Required: 1. Compute the target cost of this product. Target Cost 2. Compute the target cost if Majesty wants a 41 percent return on sales. Target Cost 3. Compute the target cost if Majesty wants a...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: $ Estimated market price Annual demand Life cycle Target profit 1.200 100,000 units 5 years 30% return on sales Required: 1. Compute the target cost of this product. Target Cost 2. Compute the target cost if Majesty wants a 40 percent return on sales. Target Cost 3. Compute the target cost if Majesty wants a...
Majesty Company uses target costing to ensure that its products are profitable. Assume Majesty is planning to introduce a new product with the following estimates: Estimated market price $ Annual demand Life cycle Target profit 1,100 85,000 units 4 years 24% return on sales Required: 1. Compute the target cost of this product. 2. Compute the target cost if Majesty wants a 42 percent return on sales. 3. Compute the target cost if Majesty wants a 5 percent return on...
Target costing calculations and life cycle cost A company is planning a new product. Market research information suggests that the product will sell 10,000 total units at a price of $21.00 per unit. The company estimates the lifetime costs of the product as follows: • Design and development costs: $50,000 • Manufacturing costs: $10 per unit • End-of-life costs: $20,000 The company estimates that if it were to spend an additional $15,000 on design, then manufac- turing costs per unit...
Accola Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 1,100 units and of Product B is 700 units. The direct production costs (material and labour) for Product A are $110,600 and for B is $70,000. There are three activity cost pools for overhead, with estimated costs and expected activity as follows: Expected Activity Product A Product B Estimated Cost Total Activity Cost Pool Activity 1 Activity 2...
Paragon Corporation has an aggressive research and development (R&D) program and uses target costing to aid in the final decision to release new products to production. A new product is being evaluated. Market research has surveyed the potential market for this product and believes that its unique features will generate a total demand of 40,000 units at an average price of $250. Design and production engineering departments have performed a value analysis of the product and have determined that the...
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