Target CostingToyota Motor Corporation uses target costing. Assume that Toyota marketing personnel estimate that the competitive selling price for the Camry in the upcoming model year willneed to be $23,300. Assume further that the Camry's total unit cost for the upcoming model year is estimated to be $19,800 and that Toyota requires a 20% profit margin onselling price (which is equivalent to a 25% markup on total cost).a. What price will Toyota establish for the Camry for the upcoming model year?18,640 Xb. Since the estimated manufacturing cost exceedsobjectives.the target cost, Toyota must reduceits total costs to maintain competitive pricing within its profitFeedbackCheck My Worka. What dictates the price?b. Compare desired profit with estimate price.

Step 1:Target costing is a method of determining a product's life-cycle cost, which should be…

Answered: Target Costing Toyota Motor Corporation…

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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Columbus Inc. sells a high end hair dryer in a super competitive marketplace. As a result, market research and competitive pressures influence the determination of their selling price. Their marketing department has done a comprehensive analysis and It looks like a price of $61 would be appropriate given the present business environment. The company has a goal of earning $30 on each unit. What is the target unit cost of each hair dryer? Enter your answers without dollar signs or commas. ASUS 13 f4 E3 X 19 OLF 11 (12 3. & 4. 5 7. 8. E T. Y. F G H K t6 立

How much should the company set as selling price if it is to achieve the target of 20% RoI?
Question: The Savannah Shirt Company is considering adding a new product line, a cloth shopping bag with custom screen printing that will be sold to grocery stores. If the current market price of cloth shopping bags is $1.25 and the company desires a net profit of 40%, what is the target cost? The company estimates the full product cost of the cloth bags will be $0.60. Should the company manufacture the cloth bags? Why or why not?
MARGINAL COSTING- Il: APPLICATION OF MARGINAL COSTING TECHNIQUES (b) the selling price is reduced by 20 % ? cycles will have to be made to get the same amount of profits, if : Snow' per month at 1.25 per jar. The company's normal production capacity is 20,000 jars of to keep the total profits intact. What level of production will have to be reached, ie., how many The company expects that due to competition they will have to reduce selling price, but they want ion is possibl of buying 20 (a) the selling price is reduced by 10 % e offer should 143 CHNIO ed as it is only when ion is possibe [Ans. (a) 1,25,000 cycles: (b)l.66,667 cycles) F+ DesiredP () the selling price is reduced by 20 % ? %3D Hint : Cycles to be sold C per unit Saow' per month at ? 1.25 per jar. The company's normal production capacity is 20,000 jars of enow per month. An analysis of cost for 10,000 jars shows: Everest Snow Company manufactures and sells direct to consumers 10,000 jars of Everest 22. 1,000 2,475 Direct…
The Gargus Company, which manufactures projection equipment, is ready to introduce a new line of portable projectors. The following data are available for a proposed model: Variable manufacturing costs Applied fixed manufacturing overhead Variable selling and administrative costs Applied fixed selling and administrative costs $ 380 190 145 160 What price will the company charge if the firm uses cost-plus pricing based on total variable cost and a markup percentage of 205%?
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Valmont Company has developed a new industrial piece of equipment called the XP-200. The company is considering two methods of establishing a selling price for the XP-200-absorption cost-plus pricing and value-based pricing. Valmont's cost accounting system reports an absorption unit product cost for XP-200 of $9,300. Its markup percentage on absorption cost is 85%. The company's marketing managers have expressed concerns about the use of absorption cost-plus pricing because it seems to overlook the fact that the XP-200 offers superior performance relative to the comparable piece of equipment sold by Valmont's primary competitor. More specifically, the XP-200 can be used for 18,000 hours before replacement. It only requires $1,900 of preventive maintenance during its useful life and it consumes $165 of electricity per 900 hours used. These figures compare favorably to the competing piece of equipment that sells for $18,000, needs to be replaced after 9,000 hours of use, requires $3,800…
Valmont Company has developed a new industrial piece of equipment called the XP-200. The company is considering two methods of establishing a selling price for the XP-200-absorption cost-plus pricing and value -based pricing. Valmont's cost accounting system reports an absorption unit product cost for XP-200 of $ 9,400. Its markup percentage on absorption cost is 85%. The company's marketing managers have expressed concerns about the use of absorption cost- plus pricing because it seems to overlook the fact that the XP-200 offers superior performance relative to the comparable piece of equipment sold by Valmont's primary competitor. More specifically, the XP-200 can be used for 19,000 hours before replacement. It only requires $2,000 of preventive maintenance during its useful life and it consumes $170 of electricity per 950 hours used. These figures compare favorably to the competing piece of equipment that sells for $19,000, needs to be replaced after 9, 500 hours of use, requires…
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Requirements: What is the margin of safety as percentage and in unit? Assume that next month management wants the company to earn a profit of $80,000. How many units will have to be sold to meet the target profit?
Assume that Smart expects to produce and sell 80,000 units but has the capacity to produce 100,000 units. The manager of Globe Division, which is currently buying 30,000 units of a similar product from outside supplier for P26.50, offers to buy the units from the Smart division only if Smart will supply 30,000 units needed. 1A. What is the maximum price Globe’s manager is likely to offer for the units? 1B. What is the minimum price Smart manager is likely to accept on a sale of 30,000 units to Globe? 1C. If Globe manager offers P24.50 per unit and Smart manager accepts the offer, what will be the amount and direction of the effect on the total income of Smart division, Globe division and Mobile TeleCom? Increasing or Decreasing direction? Help answer 1A to 1C with solution pls

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