Answer the following question(s)using the information below.After conducting a market research study, Potter Products decided to produce an electric coffee pot to complement its line of kitchen products.It is estimated that the new coffee pot can be sold at a target price of $46.The annual target sales volume for the coffee pot is 300,000.Potter has target operating income of 18% of sales.
-What is the total target cost?
A)$9,840,000
B)$11,316,000
C)$13,352,000
D)$9,279,120
E)$1,131,600

Question

Quizplus · Accepted Answer

The total target cost is calculated by subtracting the target operating income from the total sales revenue. Total sales revenue is $46 * 300,000 = $13,800,000. Target operating income is 18% of $13,800,000, which is $2,484,000. Therefore, the total target cost is $13,800,000 - $2,484,000 = $11,316,000.

Answer the Following Question(s)using the Information Below