Question

Wasson Widget Company is contemplating the production and sale of a new widget. Projected sales are $300,000 (or 75,000 units) and desired profit is $36,000. What is the target cost per unit? g

Answer 1

3.52

Step-by-step explanation:

Calculation to determine the target cost per unit?

Using this formula

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

Let plug in the formula

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

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

Target cost per unit=3.52 per unit

Therefore the target cost per unit is 3.52