1-Assuming the existing process technology is used , should the new product be released to production ? WHY ?

2- Assuming the new process technology is purchased . should the new product be released to production ??

Page Layout ReferencesMailings ReviewView Font Paragraph Ignore income taxes. Comment on the best alternative for Hawkeye Corporation 2:(5 Marks Bahrain Corporation uses target costing to aid in the final decision to release new products to production. A new product is being evaluated. Market research has surveyed the potential market for this product and believes that its unique feature will generate a total demand of $50,000 units at an average price of $230. Design and production engineering departments have performed a value analysis of the product and have determined that the total cost for the various value-chain functions using the existing process technology are as follows: Value-Chain Function Research and development Design Manufacturing Marketing Distribution Customer Service Total Cost over Product Life Total cost over product life $1,500,0000 750,000 5,000,000 800,000 1,400,000 750,000 10,200,000 Management has a target profit percentage of20% ofsales. Production engineering indicates that new process technology can reduce the manufacturing cost by 40%, but it will cost $1,000,000