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Homework answers / question archive / Hair Care is entering the professional hair dryer market
Hair Care is entering the professional hair dryer market. Research shows that their customers wish to pay $301 or less for each dryer. The estimated cost per unit for each dryer is $159 and target operating income per unit is $159. The management of Hair Care is considering use of the cost-plus approach rather than the target-cost approach. Cost accountants at the manufacturer have collected the following information: (Click the icon to view the categories.) Read the requirements 19 dryer? Requirement 1. Do you think that it's a good idea for Hair Care to use the cost-plus approach to price the Begin by determining the price that Hair Care would price the hair dryer at using the cost-plus approach. X If Hair Care used a cost-plus approach, it would cost the hair dryer at Data table Requirements $ 49 Direct material/unit Direct labor/unit $ 32 $ 27 1. Do you think that it's a good idea for Hair Care to use the cost-plus approach to price the hair dryer? 2. What strategies could Hair Care's management use to make a profit if the company insisted on using the cost-plus approach to price the hair dryer?
