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Question 1: Emmedics, Inc. is launching a new product that it estimates will sell for $30 per unit. Annual demand is estimated to be 70,000 units. Emmedics estimates that using its current manufacturing technology, it can manufacture the units for $23 per unit1 but if it purchases a new machine, the units can be manufactured for $22 per unit. Emmedics has a target pro?t of 10% return on sales. Under target costing, what is the target cost for the new product?
Option A. $20
Option B. $22
Option C. $23
Option D. $27
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