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    New target cost per unit

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    Please answer all 4 questions and show the work on excel.
    Thank you much for your help.

    Budgeted Amount Actual Amount Actual Cost
    Direct materials $4,200,000 $4,500,000
    Direct labor hrs 100,000 125,000 $1,750,000
    Machine setups 75,000 75,000 $750,000
    Mechanical assembly 375,000 400,000 $5,000,000

    Input data (from above):
    On-line selling price per unit = $3,000
    Competitor's on-line selling price per unit = $2,900
    Recommeded selling price by Weekend Golfer = $2,850
    Normal sales volume per year by Weekend Golfer = 8,000

    10-33 Requirements

    1. Calculate the current cost and profit per unit.
    2. How much of the current cost per unit is attributable to non-value-added activities?
    3. Calculate the new target cost per unit for a sales price of $2,850 if the profit per unit is maintained.
    4. What strategy do you suggest for Weekend Golfer to attain the target cost calculated in requirement 3?

    Solution

    © BrainMass Inc. brainmass.com November 30, 2021, 3:04 am ad1c9bdddf
    https://brainmass.com/business/financial-accounting-bookkeeping/new-target-cost-per-unit-229818

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    Solution Preview

    Input data (from above):
    On-line selling price per unit = $3,000
    Competitor's on-line selling ...

    Solution Summary

    Response provides the steps to compute the new target cost per unit

    $2.49

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