Refer to Scenario 19.2. BASF has decided to offer discounts to its businesses customers in the form of the following: For each o
1 answer:
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Answer: $30.10 per unit
Explanation:
Given that,
Production volume = 602,000 units per year
Market price = $34 per unit
Desired operating income = 17% of total assets
Total assets = $13,800,000
Total income = 17% of Total assets
= 0.17 × $13,800,000
= $2,346,000
Total sales = Market price × Production volume
= $34 per unit × 602,000 units
= $20,468,000
Target full product cost in total for the year:
= Total sales - Total income
= $20,468,000 - $2,346,000
= $18,122,000
Target full product cost per unit =
=
= $30.10 per unit