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Eco Tronic assembles and sells many difference types of stylus pen for android tablet and...

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Accounting

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Eco Tronic assembles and sells many difference types of stylus pen for android tablet and handphone. It is considering extending its product range to include digital screen on the stylus pen. These stylus pen produce a better touch screen and sensitivity quality than traditional stylus pen and have a large number of potential additional features not possible with the previous technologies. A stylus pen is produced by assembly workers assembling a variety of components. Production overheads are currently absorbed into product costs on an assembly labour hour basis. Eco Tronic is considering a target costing approach for its new digital screen of stylud pen. Required: a) Briefly describe the target costing process that Eco Tronic should undertake. (5 marks) b) Explain the benefits to Eco Tronic of adopting a target costing approach at such an early stage in the product development process

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