Framingham Dolls manufactures specialty custom dolls. Recently, the company developed the following cost estimates for the "Your Twin"
doll:
Estimated contract price per doll: $55.00
Estimated sales per year: 100,000 units

Required: The Company wishes to obtain a 25% return on sales for the new dolls. Calculate the target cost reduction for the new product.

Question

Framingham Dolls manufactures specialty custom dolls. Recently, the company developed the following cost estimates for the "Your Twin"
doll:
Estimated contract price per doll: $55.00
Estimated sales per year: 100,000 units
 
Required: The Company wishes to obtain a 25% return on sales for the new dolls. Calculate the target cost reduction for the new product.

Quizplus · Accepted Answer

The Answer of Framingham Dolls manufactures specialty custom dolls. Recently, the company developed the following cost estimates for the "Your Twin"
doll:
Estimated contract price per doll: $55.00
Estimated sales per year: 100,000 units
 
Required: The Company wishes to obtain a 25% return on sales for the new dolls. Calculate the target cost reduction for the new product.

Framingham Dolls Manufactures Specialty Custom Dolls