Aldot Candy Corporation Is Implementing a Target Costing Approach for Its

question 7

Multiple Choice

Aldot Candy Corporation is implementing a target costing approach for its latest new product,the "Big Glob" candy bar.The following information relates to the Big Glob: Based on this information,what is Aldot's target selling price per bar for the Big Glob?
$\begin{array}{lr}\text { Target cost per candy bar ................................ } & \$ 0.40 \\\text { Expected annual sales (in units) of candy bars ...... } & 500,000 \\\text { Required investment in additional assets .............. } & \$ 600,000 \\\text { Desired return on investment ......................... } & 20 \%\end{array}$

• A)$0.48
• B)$0.50
• C)$0.64
• D)$0.70

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Definitions:

Visual Cliff

An experimental apparatus used to study perception of depth and fear of falling in infants, demonstrating their ability to perceive depth.

Navigate

The ability to plan and direct a route or course, especially by using instruments or maps, or metaphorically in making one's way through complex situations.

Heights

Measurements of vertical dimension or elevation, or the perceived vertical dimension of an object or place.

Visual Cliff

A research tool used to measure infants' perception of depth and their ability to perceive danger in simulated environments.