Chapter 21, Problem 6CP

To determine

Concept Introduction:

Process costing is the method of determining the cost of the product when multiple departments or processes are involved in producing a product. Hence, it is named as process costing, as it is the method of determining the cost involved in each process, a product is going through.

The target cost if the company wants to earn a net profit of 60% from the new product. And explain with reason if the company should manufacture cloth bags or not.