QUESTION 1: Target Costing and value chain analysis [20 marks] PANA Organic have seen a significant increase in sales over the last 12 months. This is largely due to brand awareness and their product visible in many large retail grocery stores. The sales manager of PANA Organic has asked you to review their current pricing strategy of three of their most popular products as they are concerned that there has been an increase of new competitors offering similar products. The company wishes to use target costing for this analysis. The prices are quoted here in Australian dollars ($AUD). b) Use the information in the following table provided to calculate the target costs for the three products (ensure that you show all workings). [4 marks] Product Pana Ice-cream Pana chocolate Pana drink blends Current retail selling price $11.00 $6.00 $11.95 The current required profit margin on all PANA's products is 30% c) The current costs for producing each product per unit are provided in the table below. Which of the product/s are not meeting the target cost per unit? Why? [2 marks] Product Pana Ice-cream Pana chocolate Pana drink blends Current cost per unit $8.00 $4.00 $9.50 d) Provide two (2) suggestions as to how PANA Organic could achieve or maintain the target costs. Consider supply chain opportunities as a suggestion here. [4 marks] e) Provide three (3) ways in which a value chain analysis could assist PANA Organic in being able to identify eliminating non value added activities to improve cost reduction initiatives. Explain. [6 marks]