Computation of target selling price and target cost

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Reference no: EM139742

Computation of target selling price and target cost of manufacture

The Orange Group has been targeting a competitive product to the Apple, IPod. The product, called the Re-Rind, would allow users to listen to music, like the IPod, but also sync with multiple computers, such as home and office, unlike the IPod. They want to be perceived as a higher end product and can manufacture the product for $199 in China. They require a 40% markup after manufacturing cost. What is the targeted selling price? The Marketing Department indicates that consumers will pay $275 for such a product and tradition says they need a 30% cushion (required margin), what will the target cost of manufacture that they can support? Should they make the Re-Rind and what would you say to them to reconcile the positions?

Reference no: EM139742

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