Lyman currently sells an industrial mixer for $900 that market leaders sell for $820.The current costs to manufacture and distribute the mixer total $645,and the company has a profit goal of 30% of sales.Lyman uses target costing in its efforts to be a leader in the marketplace.On the basis of this information,(1)what should Lyman consider to be the initial driver of the target-costing process and (2)what amount of cost reduction is needed for the company to achieve its goals?
A)Choice A
B)Choice B
C)Choice C
D)Choice D
E)Choice E

Question

Lyman currently sells an industrial mixer for $900 that market leaders sell for $820.The current costs to manufacture and distribute the mixer total $645,and the company has a profit goal of 30% of sales.Lyman uses target costing in its efforts to be a leader in the marketplace.On the basis of this information,(1)what should Lyman consider to be the initial driver of the target-costing process and (2)what amount of cost reduction is needed for the company to achieve its goals? 
A)Choice A 
B)Choice B 
C)Choice C 
D)Choice D 
E)Choice E

Quizplus · Accepted Answer

The Answer of Lyman currently sells an industrial mixer for $900 that market leaders sell for $820.The current costs to manufacture and distribute the mixer total $645,and the company has a profit goal of 30% of sales.Lyman uses target costing in its efforts to be a leader in the marketplace.On the basis of this information,(1)what should Lyman consider to be the initial driver of the target-costing process and (2)what amount of cost reduction is needed for the company to achieve its goals? 
A)Choice A 
B)Choice B 
C)Choice C 
D)Choice D 
E)Choice E

Lyman Currently Sells an Industrial Mixer for $900 That Market