Despero cheese company has developed a new cheese slicer

Reference no: EM13581149

Despero Cheese Company has developed a new cheese slicer called Thin Slicer. The company plans to sell this slicer through its catalog, which it issues monthly. Given market research, Grover believes that it can charge $16 for the Thin Slicer. Prototypes of the Thin Slicer, however, are costing $22. By using cheaper materials and gaining efficiencies in mass production Despero believes it can reduce Thin Slicer's cost substantially. Despero wishes to earn a return of 20% of the selling price.

Instructions

(a) Compute the target cost for the Thin Slicer.

(b) When is target costing particularly helpful in deciding whether to produce a given product?

Reference no: EM13581149

Questions Cloud

Ashton martin is a student who plans to attend : ashton martin is a student who plans to attend approximately four professional events a year at her college. each event

Wales company purchased at a cost of 16089 and used 3100 : wales company purchased at a cost of 16089 and used 3100 pounds of materials during may. waless standard cost of

O january 20 2011 tamira nelson the accountant for picton : on january 20 2011 tamira nelson the accountant for picton enterprises is feeling pressure to complete the annual

Assume susie levitt and katie shea of cityslips plan on : assume susie levitt and katie shea of cityslips plan on expanding their business to accommodate more product lines.

Despero cheese company has developed a new cheese slicer : despero cheese company has developed a new cheese slicer called thin slicer. the company plans to sell this slicer

Madison thorne works in a public accounting firm and hopes : madison thorne works in a public accounting firm and hopes to eventually be a partner. the management of allnet company

During the current period department a finished and : during the current period department a finished and transferred 50000 units to department b. of the 50000 units 20000

Each trash can requires 10 screws for sept bb company will : each trash can requires 10 screws. for sept. bb company will begin sept with 200 screws in its beginning inventory.bb

Challenger factory produces two similar products - regular : challenger factory produces two similar products - regular widgets and deluxe widgets. the total plant overhead budget

User Account

All Pages