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Question - Culver Cheese Company has developed a new cheese slicer called the Slim Slicer. The company plans to sell this slicer through its monthly catalogue. Given market research, Culver management believes the company can charge $35 for the Slim Slicer. Prototypes of the Slim Slicer, however, are costing $39. By using cheaper materials and gaining efficiencies in mass production, management believes Culver can reduce the Slim Slicer's cost substantially. The company wants to earn a return of 40% of the selling price.
Required - Calculate the target cost for the Slim Slicer.
Indicate what accounts are debited or credited - The company uses a perpetual inventory system. All prepayments are initially recorded in permanent accounts.
What is the material quantity variance ,the plastic actually cost $80 per yard. The company made 4,200 units. Total yards used for production were 3,960.
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