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Topic: |
Business
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Number of pages / Number of words: |
4 / 1104 |
Essay's paper body
For this particular end-use our "higher value" is not "worth it" to the customer (Reebok).
Target Cost:
Selling Price $2,310.00
15% profit $301.00
Target Cost $2,009.00
The customer is prepared to pay $2,310.00 if the product is sold to them directly. The standard cost is originally $2,900.00, which is a difference of $891...
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In order to meet the selling price and to ensure a 15% profit for the company, the product would have to be produced meeting a target cost of $2,009.00.
3. Can you calculate the "ideal cost" for this product? So what?
Fiber: % Mix Market Price Cost
Hardwood 63% 425 $71.25
Softwood 15% 475 $267.75
Scrap 22% 60 $13...
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