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Question 8.PMCQ.2: (LO 1) Classic Toys has examined the market for toy train lo...

(LO 1) Classic Toys has examined the market for toy train locomotives. It believes there is a market niche in which it can sell locomotives at $80 each. It estimates that it could sell 10,000 of these locomotives annually. Variable costs to make a locomotive are expected to be $25. Classic anticipates a profit of $15 per locomotive.
The target cost for the locomotive is:
a. $80.                                     c. $40.
b. $65.                                      d. $25.

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