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The company requires a 40 profit margin on each unit if

Question - Target costing - The Ajax Company is thinking about launching a new product. Market research reveals that the product will sell in the market for $50 each unit. The company requires a 40% profit margin on each unit. If they plan to sell 100,000 units over the next three years, will what is the total target cost? What happens if the engineering and design departments comes up with a target cost per unit of $32?

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Accounting Basics: The company requires a 40 profit margin on each unit if

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