It is estimated that the new interior door can be sold at a target price of $60.

Question

It is estimated that the new interior door can be sold at a target price of $60. The annual target sales volume for interior doors is 20,000. Schultz has target operating income of 20% of sales

What is the target cost?

What is the traget operating income?

Part III. (20 points). MUST SHOW WORK! A. (10 points). Welch Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Welch Manufacturing has excess capacity. The following per unit data apply for sales to regular customers Variable costs Direct materials Direct labor Manufacturing support Marketing costs $40 20 45 Fixed costs: Manufacturing and Marketing 60 180 Total costs For Welch Manufacturing, what is the minimum acceptable price of this special order? (5 points) OM 40 1120 What is the change in operating profits if the one-time-only special order for 1,000 units is accepted for $200 a unit by Welch? (5 points). 200 o p 3003 innse 120 983 B. (10 Points). After conducting a market research study, Schultz Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $60. The annual target sales volume or interior doors is 20 000 Schultz has target operating income o 25% of sale What is the target costr? (5 points). What is the target operating income? (5 points) ),200,006 X,Rs300,00 0 300,000

Explanation / Answer

Target cost = ($60 x 20,000) - $240,000 = $960,000

Target operating income = ($60 x 20,000) x 20% = $240,000

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