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: $\begin{array}{lr}
\text { Target cost per candy bar}&\$ 0.40 \
\text { Expected annual sales (in units) of candy bars }&500,000 \
\text {Required investment in additional assets }&\$ 600,000 \
\text { Desired return on investment}&20 \%
\end{array}$ Based on this information, what is Aldot's target selling price per bar for the Big Glob?
A)$0.48
B)$0.50
C)$0.64
D)$0.70

Question

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: $\begin{array}{lr}
\text { Target cost per candy bar}&\$ 0.40 \
\text { Expected annual sales (in units) of candy bars  }&500,000 \
\text {Required investment in additional assets }&\$ 600,000 \
\text { Desired return on investment}&20 \%
\end{array}$ Based on this information, what is Aldot's target selling price per bar for the Big Glob?
A)$0.48
B)$0.50
C)$0.64
D)$0.70

Quizplus · Accepted Answer

The Answer of 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: $\begin{array}{lr}
\text { Target cost per candy bar}&\$ 0.40 \
\text { Expected annual sales (in units) of candy bars  }&500,000 \
\text {Required investment in additional assets }&\$ 600,000 \
\text { Desired return on investment}&20 \%
\end{array}$ Based on this information, what is Aldot's target selling price per bar for the Big Glob?
A)$0.48
B)$0.50
C)$0.64
D)$0.70

Aldot Candy Corporation Is Implementing a Target Costing Approach for Its