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Cann Un Company manufactures scientific calculators. The product life of a calculator is four years. Each model typically offers similar features. Cann Un targets an average profit margin of 10% of its expected revenue over the life cycle. It does not expect its manufacturing cost to vary materially over the four-year life. Estimated volumes and unit price of a particular model over its expected life is given below:
Year Volume (units) Unit price
Year 1 30,000 $85
Year 2 50,000 $75
Year 3 35,000 $50
Year 4 25,000 $45
Question 1: Applying the target costing model, the allowable unit cost of the product is:
Group of answer choices
1) $65.53 per unit
2) $150.77 per unit
3) $45.00 per unit
4) $58.98 per unit
5) $63.75 per unit
The company manufactures and sells classic cycles similar in style to Harley-Davidson and Indian motorcycles made in the late 1940s. The following financial information for the company.
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