Pueblo Products is a price-taker and uses target pricing. Please refer to the following information:
$$\begin{array} { | l | r | r | }
\hline \text { Toduction valume } & 250,000 & \text { Units per year } \
\hline \text { Market price } & \$ 2.00 & \text { Per unit } \
\hline \text { Desired aperating profit } & 10 \% & \text { Of total assets } \
\hline \text { Tatal assets } & \$ 1,000,000 & \
\hline
\end{array}$$
How much is the target full cost per year?

Question

Pueblo Products is a price-taker and uses target pricing. Please refer to the following information:
$$\begin{array} { | l | r | r | } 
\hline \text { Toduction valume } & 250,000 & \text { Units per year } \
\hline \text { Market price } & \$ 2.00 & \text { Per unit } \
\hline \text { Desired aperating profit } & 10 \% & \text { Of total assets } \
\hline \text { Tatal assets } & \$ 1,000,000 & \
\hline
\end{array}$$
How much is the target full cost per year?

Quizplus · Accepted Answer

Target full cost = Market price * Production volume - Desired operating profit= $2.00 * 250,000 - 10% * $1,000,000= $500,000 - $100,000= $400,000

Pueblo Products Is a Price-Taker and Uses Target Pricing How Much Is the Target Full Cost Per Year? A)

Pueblo Products Is a Price-Taker and Uses Target Pricing How Much Is the Target Full Cost Per Year?
A)