1, A Denner Co. is using the target cost approach on a new product. Information gathered so far reveals:

Expected annual sales 600,000 units

Desired profit per unit $0.25

Target cost $168,000

What is the target selling price per unit?

a. $0.28

b. $0.50

c. $0.25

d. $0.53

1, B Runner Inc. plans to introduce a new product and is using the target cost approach. Projected sales revenue is $810,000 ($4.50 per unit) and target costs are $748,800. What is the desired profit per unit?

a. $0.34

b. $2.08

c. $4.16

d. None of the above

1, C Tayson Widget Company is contemplating the production and sale of a new widget. Projected sales are $187,500 (or 75,000 units) and desired profit is $22,500. What is the target cost per unit?

a. $2.50

b. $2.20

c. $2.80

d. $3.00