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Question 8.DI.1: Target Costing Fine Line Phones is considering introducing a...

Target Costing

Fine Line Phones is considering introducing a fashion cover for its phones. Market research indicates that 200,000 units can be sold if the price is no more than $20. If Fine Line decides to produce the covers, it will need to invest $1,000,000 in new production equipment.  Fine Line requires a minimum rate of return of 25% on all investments.
Determine the target cost per unit for the cover.

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