Rica Company is a price-taker and uses a target-pricing approach.Refer to the following information:
$$\begin{array} { | l | l | l | }
\hline \text { Production volume } & \$ 01,000 & \text { units per year } \
\hline \text { Market price } & \$ 32 & \text { per unit } \
\hline \text { Desired operating profit } & 16 \% & \text { of total assets } \
\hline \text { Total assets } & \$ 13,700,000 & \
\hline
\end{array}$$
What is the target full product cost in total for the year? Assume all units produced are sold.

Question

Rica Company is a price-taker and uses a target-pricing approach.Refer to the following information:
$$\begin{array} { | l | l | l | } 
\hline \text { Production volume } & \$ 01,000 & \text { units per year } \
\hline \text { Market price } & \$ 32 & \text { per unit } \
\hline \text { Desired operating profit } & 16 \% & \text { of total assets } \
\hline \text { Total assets } & \$ 13,700,000 & \
\hline
\end{array}$$
What is the target full product cost in total for the year? Assume all units produced are sold.

Quizplus · Accepted Answer

The Answer of Rica Company is a price-taker and uses a target-pricing approach.Refer to the following information:
$$\begin{array} { | l | l | l | } 
\hline \text { Production volume } & \$ 01,000 & \text { units per year } \
\hline \text { Market price } & \$ 32 & \text { per unit } \
\hline \text { Desired operating profit } & 16 \% & \text { of total assets } \
\hline \text { Total assets } & \$ 13,700,000 & \
\hline
\end{array}$$
What is the target full product cost in total for the year? Assume all units produced are sold.

Rica Company Is a Price-Taker and Uses a Target-Pricing Approach