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The selling price of a product has been set at $300 per unit, and at that price the company expects to sell 1,000 units per year. The company requires a return of 20% p.a. on its investment of $1,250,000 in the product. What is the target cost per unit? (006 x 300=300,000

The selling price of a product has been set at $300 per unit, and at that price the company expects to sell 1,000 units per year. The company requires a return of 20% p.a. on its investment of $1,250,000 in the product. What is the target cost per unit? (006 x 300=300,000

FINANCIAL ACCOUNTING
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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(uso rget cost gap? 20%, of 450O,000 90,000 o-90,00O Target cost +450,000 360,000 Tca =400,000 - 360,000 unit 31000xy00 pe6 E400,000 TC %3D 40,000 achriue), Hiw QUESTION-7 The selling price of a product has been set at $300 per unit, and at that price the company expects to sell 1,000 units per year. The company requires a return of 20% p.a. on its investment of $1,250,000 in the product. What is the target cost per unit? 300,000 elliney price p profit = 1006 X 300 = 1,250,000 = 50,000 300,000 - So,000 20% x Tanget cost = = 250,000 250 per units 1000 cost olk3i
Transcribed Image Text:(uso rget cost gap? 20%, of 450O,000 90,000 o-90,00O Target cost +450,000 360,000 Tca =400,000 - 360,000 unit 31000xy00 pe6 E400,000 TC %3D 40,000 achriue), Hiw QUESTION-7 The selling price of a product has been set at $300 per unit, and at that price the company expects to sell 1,000 units per year. The company requires a return of 20% p.a. on its investment of $1,250,000 in the product. What is the target cost per unit? 300,000 elliney price p profit = 1006 X 300 = 1,250,000 = 50,000 300,000 - So,000 20% x Tanget cost = = 250,000 250 per units 1000 cost olk3i
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