Star Stationery Company is a price-taker and uses target pricing
Refer to the following information:
Production volume 600,000 units per year
Market price $30 per unit
Desired operating income 15% of total assets
Total assets $1,800,000
What is the target full product cost per year? Assume all units produced are sold.
A) $18,000,000
B) $17,730,000
C) $27,000,000
D) $9,600,000
B .B)
Revenue at market price ($30 x 600,000 ) $18,000,000
Less: Desired profit ($1,800,000 x 15%) 270,000
Target full product cost per year $17,730,000
Business
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