Hanisch Corporation Would Like to Use Target Costing for a New

question 134

Multiple Choice

Hanisch Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $22 per unit, management projects sales of 50,000 units. The new product would require an investment of $400,000. The desired return on investment is 14%. The target cost per unit is closest to:

• A) $22.00
• B) $23.80
• C) $20.88
• D) $25.08

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Definitions:

Rocky Mountain

A region in North America extending from northern Canada to New Mexico, known for its majestic landscapes and rugged mountains.

Spotted Fever

A type of bacterial infection transmitted by ticks, characterized by fever, headache, and a rash that can resemble spots on the skin.

Typhus

A group of infectious diseases caused by Rickettsia bacteria, transmitted by lice, fleas, mites, or ticks, characterized by fever, headache, rash, and often delirium.

Rickettsiae

A genus of bacteria that are the causative agents of various diseases, including typhus and rickettsialpox, and are typically transmitted by lice, fleas, or ticks.