Question1: Chuckle's Toy Manufacturing has recently performed an activity based price analysis of one of its best-selling toys, the Main Man Robot. The analysis shows the estimated monthly cost per 1,000 unit productions run:
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Currently feasible costs per month
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Expected monthly revenues
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$300,000
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Unit-level resources and activities
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mce_markernbsp; 96,000
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Batch-level resources and activities
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20,000
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Product-level resources and activities
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40,000
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Customer-level resources and activities
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24,000
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Facility-level resources and activities
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70,000
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Total feasible costs per month:
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$250,000
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Chuckle's management has targeted a required return of 20 percent of monthly revenues. To achieve its objective, Chuckle's monthly cost reduction target is:
[A] $10,000
[B] $50,000
[C] $60,000
[D] $0 - the company has already achieved its required return of 20 percent