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31 December, 09:36

Ortega Company manufactures computer hard drives. The market for hard drives is very competitive. The current market price for a computer hard drive is $76. Ortega would like a profit of $13 per drive. What target cost Ortega should set to accomplish this objective?

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  1. 31 December, 09:42
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    The correct answer is $63.

    Explanation:

    According to the scenario, the computation of the given data are as follows:

    So, we can calculate the target cost to accomplish the objective by using following formula:

    Target cost = Market price - Profit

    Where, Market price = $76

    Profit = $13

    By putting the value in the formula, we get

    Target cost = $76 - $13

    = $63
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