Shimada Products Corporation of Japan plans to introduce a new electronic component to the market at a target selling price of $15 per unit. The company is investing $6,720,000 to purchase the equipment it needs to produce and sell 504,000 units per year. Its required rate of return on all investments is 12%. Required: Compute the component's target cost per unit. Note: Round your answer to 2 decimal places. Target cost per unit $ 1.60

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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 Vinubhai 

Shimada Products Corporation of Japan plans to introduce a new electronic component to the market at a target selling price of $15
per unit. The company is investing $6,720,000 to purchase the equipment it needs to produce and sell 504,000 units per year. Its
required rate of return on all investments is 12%.
Required:
Compute the component's target cost per unit.
Note: Round your answer to 2 decimal places.
Target cost per unit
$
1.60
Transcribed Image Text:Shimada Products Corporation of Japan plans to introduce a new electronic component to the market at a target selling price of $15 per unit. The company is investing $6,720,000 to purchase the equipment it needs to produce and sell 504,000 units per year. Its required rate of return on all investments is 12%. Required: Compute the component's target cost per unit. Note: Round your answer to 2 decimal places. Target cost per unit $ 1.60
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