Question

Mesa Cheese Company has developed a new cheese slicer called Slim Slicer. The company plans to sell this slicer through its catalog, which it issues monthly. Given market research, Mesa believes that it can charge $40 for the Slim Slicer. Prototypes of the Slim Slicer, however, are costing $42. By using cheaper materials and gaining efficiencies in mass production, Mesa believes it can reduce Slim Slicer's cost substantially. Mesa wishes to earn a return of 40% of the selling price. (a) Compute the target cost for the Slim Slicer. Target cost $enter the target cost in dollars

Answer 1

Answer:

Target cost= $24

Explanation:

Giving the following information:

Given market research, Mesa believes that it can charge $40 for the Slim Slicer. Prototypes of the Slim Slicer, however, are costing $42. By using cheaper materials and gaining efficiencies in mass production, Mesa believes it can reduce Slim Slicer's cost substantially. Mesa wishes to earn a return of 40% of the selling price.

Target cost= selling price*0.6= 40*0.6= $24