If total production is 25000 units and target annual operating income is $300000, then target operating income per unit would be ____________?
Correct answer: B. $12
- A. $15
- B. $12
- C. $16
- D. $18
Explanation
Target operating income per unit is calculated by dividing total target operating income by planned production: $300,000 ÷ 25,000 units = $12 per unit. Therefore, option b is correct.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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