XYZ Company wishes to invest $ 2,000,000 for the design, development and production of a new...

 

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XYZ Company wishes to invest $ 2,000,000 for the design, development and production of a new model of blender. Accountants determine that the price cannot exceed $ 30 / unit, which is the competitive price in the market. The company wants to generate a minimum 15% profit on the sale of this product and estimates that it will sell 40,000 units in the year. 2. Determine the target cost per unit using the data presented. 3. Does the determined cost compare favorably with a cost that is determined on the basis of 130% of the variable cost per unit, which is $ 18 today? 4. Is the cost efficient based on 130% of the variable cost per unit? Justify your position XYZ Company wishes to invest $ 2,000,000 for the design, development and production of a new model of blender. Accountants determine that the price cannot exceed $ 30 / unit, which is the competitive price in the market. The company wants to generate a minimum 15% profit on the sale of this product and estimates that it will sell 40,000 units in the year. 2. Determine the target cost per unit using the data presented. 3. Does the determined cost compare favorably with a cost that is determined on the basis of 130% of the variable cost per unit, which is $ 18 today? 4. Is the cost efficient based on 130% of the variable cost per unit? Justify your position

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1 From the above problem we can determine that the maximum ... View the full answer