Calculating a Target Cost
RU Listening manufactures cell phones and is developing a new model with a feature (targeted at parents of teens) that prevents the phone from dialing an owner-defined list of phone numbers between the hours of midnight and 6:00 a.m. The new phone model has a target price of $350. Management requires a 10% profit on new product revenues.
Required: If required, round to the nearest dollar.
1. Calculate the amount of desired profit.
2. Calculate the target cost.