Sandra owns a small manufacturing company, Tamarisk Camping Stuff Co. The company has been working to perfect a lightweight plastic material to be used for a variety of camping products. Sandra plans to enter the marketplace with a durable, lightweight folding table. Similar tables regularly sell for $39-$44 for a 6-foot table, so Sandra realizes that she'll have to stay within that range. She believes her table could sell on the higher end of this range, however, so she is using a target selling price of $44 for planning purposes. Sandra needs to generate an ROI of at least 20% on her invested assets to make this worthwhile in the long term. Her invested assets are $800,000, and she expects to sell 5,000 tables in her first year of activity. (a) Calculate the target cost for one table. Target cost for one table $
Sandra owns a small manufacturing company, Tamarisk Camping Stuff Co. The company has been working to perfect a lightweight plastic material to be used for a variety of camping products. Sandra plans to enter the marketplace with a durable, lightweight folding table. Similar tables regularly sell for $39-$44 for a 6-foot table, so Sandra realizes that she'll have to stay within that range. She believes her table could sell on the higher end of this range, however, so she is using a target selling price of $44 for planning purposes. Sandra needs to generate an ROI of at least 20% on her invested assets to make this worthwhile in the long term. Her invested assets are $800,000, and she expects to sell 5,000 tables in her first year of activity. (a) Calculate the target cost for one table. Target cost for one table $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sandra owns a small manufacturing company, Tamarisk Camping Stuff Co. The company has been working to
perfect a lightweight plastic material to be used for a variety of camping products. Sandra plans to enter the
marketplace with a durable, lightweight folding table. Similar tables regularly sell for $39-$44 for a 6-foot table,
so Sandra realizes that she'll have to stay within that range. She believes her table could sell on the higher end of
this range, however, so she is using a target selling price of $44 for planning purposes.
Sandra needs to generate an ROI of at least 20% on her invested assets to make this worthwhile in the long term.
Her invested assets are $800,000, and she expects to sell 5,000 tables in her first year of activity.
(a)
Calculate the target cost for one table.
Target cost for one table
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