Answer:
$210,000
Explanation:
The computation of the target cost is shown below:
= Expected units × (Selling price per unit - desired profit per unit)
where,
Expected unit is 12,000 units
Selling price per unit is $20
And, the desired profit per unit is $2.5
Now placing these values to the above formula
So, the total target cost is
= 12,000 units × ($20 - $2.5)
= 12,000 units × $17.5
= $210,000
We simply applied the above formula
