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

Question

Quizplus · Accepted Answer

The desired profit is calculated based on the desired return on investment (ROI). With an investment of $900,000 and a desired ROI of 10%, the desired profit is $900,000 * 10% = $90,000.

Wenner Corporation Would Like to Use Target Costing for a New