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19 June, 11:37

Revolve Company is a price-taker and uses a target-pricing approach" on: September 24, 2015, 03:43:22 PM "Refer to the following information:Production volume 602,000 units per yearMarket price $32 per unitDesired operating income 15% of total assetsTotal assets $13,700,000 What is the target full product cost in total for the year? Assume all units produced are sold.

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  1. 19 June, 13:38
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    Answer: $17,209,000

    Explanation:

    Given that,

    Production volume = 602,000 units per year

    Market price = $32 per unit

    Desired operating income = 15% of total assets

    Total assets = $13,700,000

    Total Income = 15% of Total assets

    = $13,700,000 * 15%

    = $ 2,055,000

    Total Sales = Market price * Production volume

    = $32 * 602,000

    = $ 19,264,000

    Target full product cost in total for the year = Total Sales - Total Income

    = $ 9,264,000 - $2,055,000

    = $17,209,000
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