Please put correct answer in the underlined space provided.

ABC Company manufactures tablets and is developing a new modelwith a feature that can scan documents. The new model has a targetprice and management requires a 15 percent profit on new products.

Target price $350

Required:

a) Compute the amount of desired profit.

b) Compute the target cost.

ABC Company manufactures three types of filing boxes. Each typerequires the use of a special machine that has a limited capacity each year. Information on the three types of storage units is as follows:

Special machine capacity 15,000

Basic Standard Deluxe

Selling price $9.00 $30.00 $40.00

Variable cost $6.00 $20.00 $10.00

Machine hours required 0.10 0.50 0.75

The company believes that it can sell as many units as it can produce for each type of the products.

Required:

c) Compute the number of each type of products to be producedto MAXIMIZE the company's contribution margin. (Hint: the type of product that has the highest contribution marginper machine hour should be produced first, followed by the next highest in order, and then the least contribution margin. The number of units that can be produced is constrained by the special machine capacity.)