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Home Q & A Board Other Fields Homework Help Business Accounting
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sorandomkay13 sorandomkay13
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6 years ago
Peacock, Inc. sells 2,100 kayaks per year at a sales price of $500 per unit. It sells in a highly competitive market and uses target pricing. The company has calculated its target full product cost at $820,000 per year. Fixed costs are $340,000 per year and cannot be reduced. What is the target variable cost per unit assuming units sold are equal to units produced?
A) $229
B) $390
C) $552
D) $162
Textbook 
Horngren's Accounting

Horngren's Accounting


Edition: 11th
Authors:
Read 94 times
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Replies
wrote...
#1
6 years ago
 A
Explanation:  A)
Target full product cost$820,000
Less: Fixed costs340,000
Target variable costs$480,000
Target variable cost per unit = $480,000 / 2,100 units = $229
sorandomkay13 Author
wrote...
#2
6 years ago
Helps a lot... Now I'm ready for my quiz
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