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wariber [46]
3 years ago
11

Wasson Widget Company is contemplating the production and sale of a new widget. Projected sales are $300,000 (or 75,000 units) a

nd desired profit is $36,000. What is the target cost per unit?
a. $2.50
b. $2.20
c. $2.80
d. $3.00
Business
1 answer:
Ber [7]3 years ago
8 0

Answer:

Target cost per unit = $3.52

Explanation:

Given:

Projected sales = $300,000 or 75,000 units

Desired profit = $36,000

Find:

Target cost per unit

Computation:

Target cost per unit = [Projected sales - Desired profit] / Total units

Target cost per unit = [$300,000 - $36,000] / 75,000

Target cost per unit = $264,000 / 75,000

Target cost per unit = $3.52

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The Average Investment refers to the average cash invested into a particular project and is useful in calculating the rate of return. The simple formula is to add the beginning value of the asset to its ending value and divide this by 2.

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