question 2

Question 2 Paperbacks R Us is an innovative paperback book printer. it provides a range of 'disposable' paperbacks which are ideal for reading in the bath. bed or other relaxed location withom the worries about damaging a more expensive book or electronic book. This is a competitive market where just a slight amount of over pricing results in titles not achieving a breakeven level of production. hence the interest of the CEO in applying target costing to help in dealing with the latest book 'Back to the Past'. The Marketing Director estimates that the book should sell for 5.00 per copy. The Financial Controller requires a margin of 10% on the Selling Price. The company has estimated the following costs related to producing the latest book: Pages in each book: 250 pages Size of the print run: 10,000 books Direct Labour: 5 minutes per book this is for bindinglhandling Direct Labour: 30 per hour this is for bindin gihandling Paper costs: 5 per 1000 pages Binding materials: 20 per 1000 books Printing inks: 35 per 100 books All overheads: 12 per Direct Labour hour Requirements