Answer:
The target cost for each interior door $96 per door.
Explanation:
Target Price = $120
Target Sales volume = 20,000
Rate of return = 20%
Total Target sales = 20,000 x $120 = 2,400,000
Total return = 2,400,000 x 20% = 480,000
Total Cost = Total Target sales - Total Target return
Total Cost = 2,400,000 - 480,000 = 1,920,000
Target cost per door = 1,920,000 / 20,000 = $96 per door
