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Quality Industries manufactures large workbenches for industrial use. Yewell Hartnet, the Vice President for marketing...

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Accounting

Quality Industries manufactures large workbenches for industrial use. Yewell Hartnet, the Vice President for marketing at Quality Industries, concluded from market analysis that sales were dwindling for Quality's workbenches due to aggressive pricing by competitors. Quality's workbench sells for $1,140 whereas the competition's comparable workbench sells for $1,060. Yewell determined that a price drop to $1,060 would be necessary to protect its market share and maintain an annual sales level of 13,000 workbenches. Cost data based on sales of 13,000 workbenches: Budgeted Quantity Actual Quantity Actual Cost Direct materials (pounds) 175,000 168,000 $ 3,450,000 Direct labor (hours) 72,800 71,500 825,000 Machine setups (no. of setups) 900 880 250,000 Mechanical assembly (machine hours) 273,000 281,250 3,750,000

If the profit per unit is maintained, the target cost per unit is (rounded to the nearest whole dollar):

Answers could be:

$516.

$345.

$424.

$489.

$557.

Answer & Explanation Solved by verified expert
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