Exercise 4.36 (Algo) Target Costing and Purchasing Decisions (LO 4-3) Mather, Incorporated makes and sells...
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Exercise 4.36 (Algo) Target Costing and Purchasing Decisions (LO 4-3) Mather, Incorporated makes and sells enclosures for external hard drives. Mather management believes that a new model of enclosure made out of a hard plastic would sell well at a price of $30.00. Labor costs are estimated at $6.60 per unit and overhead costs would be $250 per unit. The major uncertainty is the price of the plastic. Mather is considering several vendors and is preparing for negotiations. Mather management insists on an estimated return on selling price of 24 percent. Required: What is the most Mather can pay for the plastic per unit (per enclosure) and meet its profitability goal? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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