7. Brittney Javelin Company is considering introducing a new spear fishing product during 2019. The company...
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7. Brittney Javelin Company is considering introducing a new spear fishing product during 2019. The company plans to use target costing to manage the product development process. Based on market research, the Company concluded that it can generate sufficient demand for the new product at a maximum price of $45 per unit to justify its introduction. It is standard policy that all new products must generate a minimum profit margin of 30% after considering all costs to produce, market, and deliver the products. The product design team developed the following estimates of the costs required to produce and sell the new spear fishing product: Direct Manufacturing Costs Indirect Manufacturing Costs Packaging Costs Marketing and Promotion $15.25 $7.40 $0.65 $1.25 Sales Commissions 4% of Sales Distribution Costs $1.50 Your Answer Determine the target cost that must be established for the new a. spear fishing product. (3 points) Supporting Computation Required: Your Answer Determine the total estimated cost to produce and sell the new b. spear fishing product as determined by the product design team. (4 points) Supporting Computation Required: Your Answer Would Brittney Javelin Company accept or reject the design of the C. spear fishing product as determined by the product design team? (3 polnts) Brief Explanation Required: 7. Brittney Javelin Company is considering introducing a new spear fishing product during 2019. The company plans to use target costing to manage the product development process. Based on market research, the Company concluded that it can generate sufficient demand for the new product at a maximum price of $45 per unit to justify its introduction. It is standard policy that all new products must generate a minimum profit margin of 30% after considering all costs to produce, market, and deliver the products. The product design team developed the following estimates of the costs required to produce and sell the new spear fishing product: Direct Manufacturing Costs Indirect Manufacturing Costs Packaging Costs Marketing and Promotion $15.25 $7.40 $0.65 $1.25 Sales Commissions 4% of Sales Distribution Costs $1.50 Your Answer Determine the target cost that must be established for the new a. spear fishing product. (3 points) Supporting Computation Required: Your Answer Determine the total estimated cost to produce and sell the new b. spear fishing product as determined by the product design team. (4 points) Supporting Computation Required: Your Answer Would Brittney Javelin Company accept or reject the design of the C. spear fishing product as determined by the product design team? (3 polnts) Brief Explanation Required:
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Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
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