Target costing-elasticity of demand

Assignment Help Managerial Accounting

Reference no: EM1349800

1. The management of Giammarino Corporation is considering introducing a new product--a compact barbecue. At a selling price of $78 per unit, management projects sales of 10,000 units. Launching the barbecue as a new product would require an investment of $100,000. The desired return on investment is 11%. The target cost per barbecue is closest to:

a. $86.58
b. $78.00
c. $76.90
d. $85.36

2. Hanisch Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $22 per unit, management projects sales of 50,000 units. The new product would require an investment of $400,000. The desired return on investment is 14%. The target cost per unit is closest to:

a. $22.00
b. $23.80
c. $20.88
d. $25.08

3. A new product, an automated crepe maker, is being introduced at Knutt Corporation. At a selling price of $59 per unit, management projects sales of 70,000 units. Launching the crepe maker as a new product would require an investment of $500,000. The desired return on investment is 12%. The target cost per crepe maker is closest to:

a. $59.00
b. $66.08
c. $58.14
d. $65.12

4. Boe Company's management believes that every 3% decrease in the selling price of one of the company's products would lead to a 9% increase in the product's total unit sales. The product's variable cost is $11.30 per unit. The product's price elasticity of demand as defined in the text is closest to:

a. −2.33
b. −1.07
c. −2.83
d. −2.95

5. Wenner Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $44 per unit, management projects sales of 10,000 units. The new product would require an investment of $900,000. The desired return on investment is 10%. The desired profit according to the target costing calculations is:

a. $90,000
b. $350,000
c. $44,000
d. $440,000

Reference no: EM1349800

Questions Cloud

Determine npv : A new blast furnace delivered in one year. the value $1,000,000 for furnace is due in one year. a discount of $50,000 is payed now and an interest rate of 7 percent calculate the NPV.

Show career management programs : Describe the importance of at least two reasons to justify the trend toward increased emphasis by corporations on career management programs.

Participation in public discourse : how do we respond effectively as researchers to ensure that bias from our own participation in public discourse is eliminated?

Addresses management conflicts and personal values : How do you negotiate a conflict to a management request that impacts your own personal values

Target costing-elasticity of demand : The management of Giammarino Corporation is considering introducing a new product--a compact barbecue. At a selling price of $78 per unit, management projects sales of 10,000 units. Launching the barbecue as a new product would require an investme..

Calculate the degree of operating and combined leverage : An analytical income statement for Detroit Heat Treating is given below. It is based on an output (sales) level of 40,000 units.

Addresses levels of conflict in organizations. : Has anyone seen any of these operating in the workplace and Please share your example and if and how it was addressed/resolved.

Addresses minimizing negative conflict : What steps can a manager take to minimize negative conflict and provide specific actions/steps to minimize conflict that a manager can implement.

Bad management-good management impacts : How does bad management impact your organization's success? How does good management impact your organization's success?

User Account

All Pages