Target costing-mucky duck swimsuits

Assignment Help Managerial Accounting

Reference no: EM1347148

Mucky Duck makes swimsuits and sells these suits directly to retailers. Although Mucky Duck has a variety of suits, it does not make the All-Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $110. Given its experience, Mucky Duck believes the All-Body suit would have the following manufacturing costs.

Direct materials $25

Direct labor $30

Manufacturing overhead $45

Total costs $100

(a) Assume that Mucky Duck uses cost-plus pricing, setting the selling price 25% above its costs. (1.) What would be the price charged for the All-Body swimsuit? (2.) Under what circumstances might Mucky duck consider manufacturing the All-Body swimsuit given this approach?

(b) Assume that Mucky Duck uses target costing. What is the price that Mucky Duck would charge the retailer for the All-Body swimsuit?

(c) What is the highest acceptable manufacturing cost Mucky Duck would be willing to incur to produce the All-Body swimsuit, if it desired a profit of $25 per unit?

Reference no: EM1347148

Questions Cloud

Explain how each theory would apply in this situation : Emily and Richard have invested in Faster Distribution, a small publicly traded company. They each own 40% of the stock of Faster Distribution.

What factor pressure of gas change during the compression : A 1500 kg car traveling at a speed of 20 m/s skids to a halt on wet concrete where kinetic friction= 0.20. How far are the skid marks.

How information affect your calculation of inflation rate : Explain how you were to learn that a bottle of Gatorade rise in size from 2009 to 2010, should that information affect your calculation of the inflation rate.

Selecting the correct option for expected return : Given the following data for 3 stocks, A,B,& C, and portfolios of these stocks. The stocks' returns are positively but not perfectly positively correlated with othe,

Target costing-mucky duck swimsuits : Assume that Mucky Duck uses target costing. What is the price that Mucky Duck would charge the retailer for the All-Body swimsuit? What is the highest acceptable manufacturing cost Mucky Duck would be willing to incur to produce the All-Body swim..

Compute the aggregate demand and aggregate supply curve : Compute the aggregate demand curve and aggregate supply curve that would maintain the state of economy in less than full-employment level of real GDP.

Motivational analyses and productivity : Identify and analyze the implications of applying any two motivational theories not currently in practice in the selected workplace and how these motivational theories would impact both management and employees.

Explain the maximum force that exerted on the femur bone : A broad beam of light of wavelength 485nm is incident at 90° on a thin, wedge-shaped film with index of refraction 1.50. An observer intercepting the light transmitted by the film sees 17 bright and 16 dark fringes along the length of the film. By..

Relationship between certifications and performance : Describe the relationship between certifications and performance? What does "performance" mean and how do you measure it?

User Account

All Pages