Texun Electronics manufactures scientific calculators. The product life of a calculator is four years. Each model typically offers similar features. Texun targets and average profit margin of 10% of its expected revenue over the life cycle. It does not expect its manufacturing cost to vary materially over the four-year life. Estimated volumes and unit price of model TE75 over its expected life is given below: Applying the target costing model, the allowable unit cost of TE75 is: a. $150.77
B) $58.98
C) $65.53
D) $63.75
E) $45

Question

Texun Electronics manufactures scientific calculators. The product life of a calculator is four years. Each model typically offers similar features. Texun targets and average profit margin of 10% of its expected revenue over the life cycle. It does not expect its manufacturing cost to vary materially over the four-year life. Estimated volumes and unit price of model TE75 over its expected life is given below:  Applying the target costing model, the allowable unit cost of TE75 is: a. $150.77
B) $58.98
C) $65.53
D) $63.75
E) $45

Quizplus · Accepted Answer

The Answer of Texun Electronics manufactures scientific calculators. The product life of a calculator is four years. Each model typically offers similar features. Texun targets and average profit margin of 10% of its expected revenue over the life cycle. It does not expect its manufacturing cost to vary materially over the four-year life. Estimated volumes and unit price of model TE75 over its expected life is given below:  Applying the target costing model, the allowable unit cost of TE75 is: a. $150.77
B) $58.98
C) $65.53
D) $63.75
E) $45

Texun Electronics Manufactures Scientific Calculators