Assume that the $400,000 in manufacturing overhead was driven by the following activities.How much of the $400,000 in manufacturing overhead cost is unutilized?
For this question only, assume that the ABC analysis showed that the total manufacturing cost of the unique model was $160 per unit. Anderson uses target costing to set its cost reduction goals. A recent market study revealed that customers would be willing to pay $180 for the unique product, and Anderson's stockholders require a 20% gross margin. What is the cost reduction target for the unique product?Provide two specific suggestions for how Anderson can use ABM to meet the cost reduction target calculated above?