Target cost and cost reduction to achieve target cost

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Reference no: EM13824618

Cristal Pty Ltd has decided to use target costing for all new products.

The following data is available for a new product currently under consideration:

Estimated sales volume 100,000

Target selling price $190 per unit

Desired profit margin on new product launches 20 percent

Standard product cost for the new product based on current operating conditions $156 per unit

Which of the following figures show the target cost for the new product and the cost reduction required per unit to achieve the target cost?

Target cost per unit Cost reduction per unit

$ $

A. 125 4

B. 125 34

C. 152 4

D. 152 38

Additional Information

This question belongs to Operations Management and the question Describe about the board cost for new product and the cost reduction required to achieve the target cost.

Reference no: EM13824618

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