Hauber Corporation Would Like to Use Target Costing for a New

question 61

Multiple Choice

Hauber Corporation would like to use target costing for a new product it is considering introducing. At a selling price of $26 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 20%.
-The target cost per unit is closest to:

• A) $26.00
• B) $31.20
• C) $30.00
• D) $25.00

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Definitions:

Material Alteration

The major alteration of an agreement that has the effect of discharging the contract and replacing it with another.

Renegotiate

The process of revising the terms and conditions of an existing contract through mutual agreement between the involved parties.

Amend

To alter, modify, or add to a legal document or legislative bill.

Payment Clause

A contractual provision that outlines the specific terms regarding the payment schedule, methods, amounts, and conditions under a contract.