Blumstein Corporation Would Like to Use Target Costing for a New

question 52

Multiple Choice

Blumstein 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 60,000 units. The new product would require an investment of $300,000. The desired return on investment is 11%.
-The desired profit according to the target costing calculations is:

• A)$33,000
• B)$145,200
• C)$1,287,000
• D)$1,320,000

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Definitions:

Customer Satisfaction

A measure of how products or services provided by a company meet or surpass customer expectations.

Financial Performance

A measurement of how well a company can use assets from its primary mode of business and generate revenues.

High-Performance Work System

An organizational approach designed to enhance employee effectiveness and productivity through improved job design, training, management practices, and rewards.

Reward Systems

Frameworks within organizations designed to recognize and compensate employees' achievements, contributions, and performance.