Revolve Company is a price-taker and uses a target-pricing approach
Refer to the following information:
Production volume 602,000 units per year
Market price $32 per unit
Desired operating income 15% of total assets
Total assets $13,700,000
What is the target full product cost in total for the year? Assume all units produced are sold.
A) $90,300
B) $17,209,000
C) $13,700,000
D) $2,055,000
B .B)
Revenue at market price (602,000 x 32 ) $19,264,000
Less: Desired profit (13,700,000 x 15%) 2,055,000
Target cost $17,209,000
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