Bond CoIs Using the Target Cost Approach on a New Product

question 111

Multiple Choice

Bond Co.is using the target cost approach on a new product.Information gathered so far reveals: $\begin{array}{ll}\text { Expected annual sales } & 400,000 \text { units } \\\text { Desired profit per unit } & \$ 0.35 \\\text { Tarqet cost } & \$ 168,000\end{array}$ What is the target selling price per unit?

• A)$0.42
• B)$0.70
• C)$0.35
• D)$0.77

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Definitions:

Spending Variance

The difference between the actual spending and the budgeted or planned amount, often examined to manage and control expenses.

Spending Variance

The difference between the actual spending and the budgeted or planned spending in a budgetary control system.

Laundry Costs

Expenses associated with the cleaning of textiles, garments, and other fabrics, often considered in both personal finance and in the operating costs of businesses that require frequent laundering of uniforms or linens.

Manufacturing Overhead

The indirect costs associated with manufacturing, including costs related to operating the factory that are not directly tied to the production of goods.