Wenner Corporation Would Like to Use Target Costing for a New

question 168

Multiple Choice

Wenner Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $44 per unit, management projects sales of 10,000 units. The new product would require an investment of $900,000. The desired return on investment is 10%.The desired profit according to the target costing calculations is:

• A) $90,000
• B) $350,000
• C) $44,000
• D) $440,000

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Definitions:

Note

A promise by the maker of the note to pay the payee of the note.

Bank

A financial institution licensed to receive deposits, offer loans, and provide various financial services to individuals and businesses.

Negotiable Instruments

Financial documents that guarantee the payment of a specified sum of money, either on-demand or at a set time.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize statutes across the states to facilitate easier interstate commerce.