Concord Company is involved in producing and selling high-end golf equipment. The company has recently been involved in developingvarious types of laser guns to measure yardages on the golf course. One small laser gun, called LittleLaser, appears to have a very largepotential market. Because of competition, Concord does not believe that it can charge more than $82 for LittleLaser. At this price.Concord believes it can sell 113,000 of these laser guns. Concord will require an investment of $10,170,000 to manufacture, and thecompany wants an ROI of 20%Determine the target cost for one LittleLaser.Target cost$

Target costing : It is a system of profit planning and cost management.Target costing allows the…

Answered: Concord Company is involved in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mad Scientist, Inc. is considering investing into the nanotechnology business. After conducting a detailed due diligence process, the company's board decided that the current cost of entry into the nanotechnology business is too high. The board also thinks that the commercialization of technological advancements will eventually drive costs down and the company should get into the nanotech business one or two years from now, when they can realize a higher NPV on their investment. Given the above, the board has chosen the option to: Expand Abandon Delay
Annie's Homemade currently owns one push cart along with a branded tent to facilitate off-site sales. The company is considering buying a second push cart and tent for $4,500 to expand its off-site sales opportunities. Because the company's cargo trailer has the capacity to transport two push carts, there is no need to buy an additional trailer at this time. Annie's provided the following estimates to assist with analyzing the investment in an additional push cart: Additional sales events per month (in June, July, August, and September) Average number of servings sold per event Selling price per serving Ingredients and packaging cost per serving Average time for manager to make one batch of 100 servings of ice cream Average time for employees to pre-package one serving of ice cream Pickup truck diesel fuel, oil, and diesel exhaust fluid expenses Average duration of each event (including drive time) Average number of employees working at each event Hourly wage rate for managers Hourly…
McGilla Golf has decided to sell a new line of golf clubs and would like to know the sensitivity of NPV to changes in the price of the new clubs and the quantity of new clubs sold. The clubs will sell for $810 per set and have a variable cost of $410 per set. The company has spent $151,000 for a marketing study that determined the company will sell 55,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 9,600 sets of its high-priced clubs. The high-priced clubs sell at $1,110 and have variable costs of $710. The company will also increase sales of its cheap clubs by 11,100 sets. The cheap clubs sell for $450 and have variable costs of $235 per set. The fixed costs each year will be $9,110,000. The company has also spent $1,120,000 on research and development for the new clubs. The plant and equipment required will cost $28,770,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net…
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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 $22.50. Sid's desires an operating profit of 25 percent of costs. Required: What is the highest acceptable manufacturing cost for which Sid's would be willing to produce the cover? (Round your answer to 2 decimal places.)
Whitmore Glassware makes a variety of drinking glasses and mugs. The company's designers have discovered a market for a 16 ounce mug with college logos. Market research indicates that a mug like this would sell well in the market priced at $26.65. Whitmore only introduces a product if they can an operating profit of 30 percent of costs. Required: What is the highest acceptable manufacturing cost for which Whitmore would be willing to produce the mugs? (Round your answer to 2 decimal places.) Highest acceptable manufacturing costs

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