A consumer goods company develops a new product with a target selling price of $50 unit Current costs estimate Direct materials $20 unit, direct labor $10 unit, overhead $15 unit 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 to meet the target cost Evaluate the impact of target costing on product profitability and market competitiveness

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Question: A consumer goods company develops a new product with a target selling price of $50/unit. Current costs estimate: Direct materials $20/unit, direct labor $10/unit, overhead

A consumer goods company develops a new product with a target selling price of $50/unit. Current costs estimate: Direct materials $20/unit, direct labor $10/unit, overhead $15/unit.

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 to meet the target cost.
- Evaluate the impact of target costing on product profitability and market competitiveness.

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