target costing

Project Description:

management at fox valley machine tool co is considering the development of a new automated drill press called the auto drill. after conferring with the design engineers the controller's staff assembled the following data about this product
target selling price $6,000 per unit
desired profit percentage 20% of total unit cost
projected unit demand 4,500
activity based cost rates
material handling 5% of direct materials and purchased parts cost
enginering $300 per unit for autodrill
production and assembly $50 per machine hour
delivery $570 per unit for auto drill
marketing $400 per unit for auto drill
per-unit data
direct material cost $1,620
purchased parts cost $200
manufacturing labor
hours 6
hourly labor rate $14
assembly labor
hour 10
hourly labor rate $15
machine hours 30
1-compute the product's target cost
2-compute the product's projected unit cost based on the design engineers's estimates
3-should management produce and market the autodrill defend your answer
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Project Stats:

Price Type: Negotiable

Total Proposals: 2
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