Gotham Products is a price-taker and uses target pricing. Please refer to the following information: $$\begin{array} { | l | r | l | }
\hline \text { Production volume } & 300,000 & \text { units per year } \
\hline \text { Market price } & \$ 3 & \text { per unit } \
\hline \text { Desired operating income } & 15 \% & \text { of total assets } \
\hline \text { Total assets } & \$ 2,000,000 & \
\hline
\end{array}$$ How much is the target full product cost per year? Assume all units produced are sold.

Question

Gotham Products is a price-taker and uses target pricing. Please refer to the following information: $$\begin{array} { | l | r | l | } 
\hline \text { Production volume } & 300,000 & \text { units per year } \
\hline \text { Market price } & \$ 3 & \text { per unit } \
\hline \text { Desired operating income } & 15 \% & \text { of total assets } \
\hline \text { Total assets } & \$ 2,000,000 & \
\hline
\end{array}$$ How much is the target full product cost per year? Assume all units produced are sold.

Quizplus · Accepted Answer

The Answer of Gotham Products is a price-taker and uses target pricing. Please refer to the following information: $$\begin{array} { | l | r | l | } 
\hline \text { Production volume } & 300,000 & \text { units per year } \
\hline \text { Market price } & \$ 3 & \text { per unit } \
\hline \text { Desired operating income } & 15 \% & \text { of total assets } \
\hline \text { Total assets } & \$ 2,000,000 & \
\hline
\end{array}$$ How much is the target full product cost per year? Assume all units produced are sold.

Gotham Products Is a Price-Taker and Uses Target Pricing How Much Is the Target Full Product Cost Per Year