Basic Motor Corporation uses target costing. Assume that Basic marketing personnel estimate that the competitive selling price for the QuikCar in the upcoming model year will need to be $23,700. Assume further that the QuikCar's total unit cost for the upcoming model year is estimated to be $19,200 and that Basic requires a 20% profit margin on selling price.
a. What price will Basic establish for the QuikCar for the upcoming model year?$
b. What impact will target costing have on Basic, given the assumed information?The input in the box below will not be graded, but may be reviewed and considered by your instructor.