a. What price will Basic establish for the QuikCar for the upcoming model year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Diff Analysis & Product Pricing:
Transcribed Image Text:Target Costing
Basic Motor Corporation uses target costing. Assume that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $23,100. Assume
further that the QuikCar's total unit cost for the upcoming model year is estimated to be $20,000 and that Basic requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total
cost).
a. What price will Basic establish for the QuikCar for the upcoming model year?
2$
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