Question: A consumer electronics company develops a new smartphone with target selling price $500/unit. Estimated costs include: Direct materials $150/unit, direct labor $50/unit, overhead $100,000. Requirements:

  1. A consumer electronics company develops a new smartphone with target selling price $500/unit. Estimated costs include: Direct materials $150/unit, direct labor $50/unit, overhead $100,000.
    • Requirements:
      • Calculate the target cost per unit and the target cost gap.
      • Discuss value engineering techniques to achieve the target cost.
      • Analyze the feasibility of achieving the target cost based on current cost estimates.
      • Recommend cost reduction strategies without compromising product quality.
      • Evaluate the impact of target costing on product profitability and market competitiveness.

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