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What is the total target cost

The question:

Market research sets the price of a clay pot for at $5.20 each. Management determines a margin of 30% is required for long-term profitability. The company produced 14,000 pots in June. What is the total target cost June?

I got the follwoing:

Selling price - Required profit margin = Target cost
Selling price    $5.20
Less required margin    -1.56 = .3x5.2
Target cost    $3.64
Total Target cost    $50,960 = 3.64 x14000

Answer: $50,960

Is my process for calculation correct? My answer correct?

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the total target cost

Reference No:- TGS01451268

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Solution Preview :

Prepared by a verified Expert

Finance Basics: What is the total target cost

Reference No:- TGS01451268

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