FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Basic Motor Corporation uses target costing. Assume that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $23,400. Assume further that the QuikCar's total unit cost for the upcoming model year is estimated to be $19,900 and that Basic requires a 20% profit margin on selling price (which is equivalent to a 25% markup on total cost).

a.  What price will Basic establish for the QuikCar for the upcoming model year?
$fill in the blank 1

b.  Since the estimated manufacturing cost   the target cost, Basic   its total costs to maintain competitive pricing within its profit objectives.

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