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How much is the target cost per unit

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Q1) Backpack Company has $6.40 per unit in variable costs and $4.90 per unit in fixed costs at a volume of 50,000 units. If Backpack marks up total cost by 0.58, what price should be charged if 65,000 units are expected to be sold?

Q2) Golden Safety has designed a new product. Several managers and employees from the cost accounting department and the marketing department are also on the team to evaluate the product and determine the cost using a target costing methodology. An analysis of similar products on the market suggests a price of $123.00 per unit. The company requires a profit of 0.25 of selling price. How much is the target cost per unit?

Reference no: EM132610001

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