(Target costing) StatPro has just been presented the following market and production estimates on Product X27, which has been under development in the company.
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Projected market price of X27 |
$215 (based on 180,000 life cycle unit sales over5 year life) |
|
|
Projected gross margin per unit |
35 |
|
|
Estimated selling and administrative costs per unit |
40 |
|
|
Estimated production costs Direct material |
$70 |
|
|
Direct labor |
40 |
|
|
Variable overhead |
15 |
|
|
Fixed overhead |
$360,000 annually |
Use the concept of target costing to integrate the marketing and engineering information and interpret the results for StatPro.