Target CostingLaser Cast Inc. manufactures color laser printers. Model 320 presently sells for $450 and has a product cost of $360, as follows:Direct materials$260Direct labor70Factory overheadTotal$360It is estimated that the competitive selling price for color laser printers of this type will drop to $430 next year. Laser Cast has established atarget cost to maintain its historical markup percentage on product cost. Engineers have provided the following cost-reduction ideas:301. Purchase a plastic printer cover with snap-on assembly, rather than with screws. This will reduce the amount of direct labor by 9 minutesper unit.2. Add an inspection step that will add six minkstes per unit of direct labor but reduce the materials cost by $9 per unit.3. Decrease the cycle time of the injection molding machine from four minutes to three minutes per part. Thirty percent of the direct laborand 40% of the factory overhead are related to running injection molding machines.The direct labor rate is $29 per hour.a. Determine the target cost for Model 320, assuming that the historical markup on product cost and selling price are maintained. Roundyour final answer to two decimal places.per unitb. Determine the required cost reduction. Round your final answer to two decimal places.per unitc. Evaluate the three engineering improvements together to determine if the required cost reduction (drift) can be achieved. Do not round It is estimated that the competitive selling price for color laser printers of this type will drop to $430 next year. Laser Cast has established atarget cost to maintain its historical markup percentage on product cost. Engineers have provided the following cost-reduction ideas:1. Purchase a plastic printer cover with snap-on assembly, rather than with screws. This will reduce the amount of direct labor by 9 minutesper unit.2. Add an inspection step that will add six minutes per unit of direct labor but reduce the materials cost by $9 per unit.3. Decrease the cycle time of the injection molding machine from four minutes to three minutes per part. Thirty percent of the direct laborand 40% of the factory overhead are related to running injection molding machines.The direct labor rate is $29 per hour.a. Determine the target cost for Model 320, assuming that the historical markup on product cost and selling price are maintained. Roundyour final answer to two decimal places.per unitsb. Determine the required cost reduction. Round your final answer to two decimal places.per unitc. Evaluate the three engineering improvements together to determine if the required cost reduction (drift) can be achieved. Do not roundinterim calculations but round your final answers to two decimal places.1. Direct labor reduction2. Additional inspection3. Injection molding productivity improvementTotal savingsper unitper unitper unitper unit

Target costing : Target costing is a cost management technique that entails deciding on a target…

a. Determine the target cost for Model 320, assuming that the historical markup on product cost and selling price are maintained. Round your final answer to two decimal places. per unit b. Determine the required cost reduction. Round your final answer to two decimal places. per unit

a. Determine the target cost for Model 320, assuming that the historical markup on product cost and selling price are maintained. Round your final answer to two decimal places. per unit b. Determine the required cost reduction. Round your final answer to two decimal places. per unit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Determine the I target cost for model J 20, assuming that the historical markup on product cost and selling price are maintained
Find out BEP in units and value with the following data:Fixed cost - $30000Variable cost - $20 per unitSelling Price - $50 per unit.
Given the following information, find dollar sales: a. Fixed costs, $60,000; profit, $18,000; sales price per unit, $8.00; variable cost per unit, $5.00 b. Variable rate, .45; profit, $21,578.10; fixed costs, $58,382 c. Sales price per unit, $16.60; profit, $21,220; contribution margin, $9.29; fixed costs, $126,000
! Required information [The following information applies to the questions displayed below.] Felix & Company reports the following information. Period Units Produced 0 560 960 123456789 10 1,360 1,760 2,160 2,560 2,960 3,360 3,760 Total Costs $ 4,660 3,960 4,360 4,960 4,060 4,260 8,760 16,160 4,960 11,992 (1) Use the high-low method to estimate the fixed and variable components of total costs. (2) Estimate total costs if 2,440 units are produced.
Using the conventional method I got the cost per unit for Product A: 54 GBP and Product B: 110 GBP and using the ABC principles I got the cost for Product A: 80 GBP and for Product B: 63 GBP. What are the causes for any differences in the cost based on obtained results?
K Suppose that a company offers quantity discounts. If up to 1,000 units are purchased, the unit price is $12; if more than 1,000 and up to 5,000 units are purchased, the unit price is $8.00; and if more than 5,000 units are purchased, the unit price is $7.50. Develop an Excel template using the VLOOKUP function to find the unit price associated with any order quantity and compute the total cost of the order. Complete the formulas in the spreadsheet below. Select the correct VLOOKUP function in cell C8 to find the unit price for the order quantity. (Type integers or decimals rounded to two decimal places as needed.) 1 2 3 5 6 7 8 6 A B C Purchase Quantity 1 to 1000 1001 to 5000 5001 or more Quantity Ordered Unit Price Total Cost 2400 D Unit Price $ $ $
Please answer with explanation. I will really upvote
Using the variable cost method of applying the cost-plus approach to product pricing, determine the selling price for 22,500 units using the following data: variable cost per unit, $15; total fixed costs, $180,000; and desired profit, $225,000. Do not round intermediate calculations. Round your answer to the nearest whole dollar.
Choose the correct letter of answer On a scattergrap, the diagonal line cuts across two sets of observations, namely: 600:200, and 900:500 which refer to costs and units, respectively. The fixed costs is plotted in the graph at P400. In this case, the variable cost per unit is equal to: a. P1.00b. P1.25c. P1.50d. P1.12
a) Compute the breakeven sales dollars of cach product assuming the same sales mix remains constant. b) Prepare an analysis showing whether Product Z should be eliminated. The amount of change to net income should be computed. c) Assume the current demand of cach product is same as the sales volume the company has for the year. Below is the machine processing time required for cach product. Product Machine processing time in hours i. How many units should the company produce for each product if there is a constraint of only 24.000 hours of machine processing time in the year. ii. Compute the highest possible net income camed by the company. 3 2 An accountant has prepared the folowing product-line income statement for the year: Product Tatal No of mts sokd 5,000 4,000 4,000 Saks Varible enpermes 200,000 S 120,000 100,000 S 60.000 40,000 S 20,000 60,000 40,000 20,000 Cotribution mangin 80,000 40,000 20,000 Fihed expenses Rert Depreciin 10,000 12,000 8,000 5.000 6,000 2,000 2,400 3,000…
1. Using the high-low method of cost estimation, estimate the behavior of the maintenance costs incurred by Nation’s Capital Fitness, Incorporated. Express the cost behavior pattern in equation form. Note: Round coefficient of X to 2 decimal places and other answer to the nearest whole dollar amount. 2. 2. Using your answer to requirement 1, what is the variable component of the maintenance cost? Note: Round your answer to 2 decimal places.
Calculate per-unit costs and compare to last year. Are the reduced unit costs for Product A due to scale or scope? Product A last year Product B last year Units Production Cost Marketing Cost 100 50 200 80 2.5 4 Units Production Cost Marketing Cost Product A coming year 150 150 40 Product B coming year 200 80 2 3.2 a. The reduced per unit costs for product A are due to scale b. The reduced per unit costs for product A are due to scope c. We cannot be certain whether the reduced per unit costs for product A are due to scale or scope. d. The reduced per unit costs for product A are due to both scale and scope