Alway 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: Based on this information, what is Alway's target selling price per bar for the Big Glob?

Question

Alway 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:  Based on this information, what is Alway's target selling price per bar for the Big Glob?

Quizplus · Accepted Answer

11eacbfc_c833_8d03_8ffe_d1c762f268b1_TB7552_00 $0.60 per unit = (200,000X − $20,000) ÷ 200,000 units
(200,000X − $20,000) = $0.60 per unit × 200,000 units
200,000X − $20,000 = $120,000
200,000X = $120,000 + $20,000
200,000X = $140,000
X = $140,000 ÷ 200,000
X = $0.70

Alway Candy Corporation Is Implementing a Target Costing Approach for Its