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charleston affair currently sells 1,000 units of product z for $64.50 and expects the price...

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Accounting

charleston affair currently sells 1,000 units of product z for $64.50 and expects the price to rise by 12% in the upcoming year. The balance sheet shows total assets of $200,000, & management has set a required rate of return of 15% on the assets. Use the target method to determine the total target cost the company should achieve.

Selling Price=$72.24 ($64.50 x 1.12) ***Where do they get 1.12?

Desired Profit=$30,000 ($200,000 x 15%)

Target Cost=$42,240 ($72.24 x 1,000 units) - $30,000

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