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Oregon Equipment Company wants to develop a new log-splitting machine for rural homeowners. Market research has determined that the company could sell 5,000 log-splitting machines per year at a retail price of $600 each. An independent catalog company would handle sales for an annual fee of $3,000 plus $70 per unit sold. The cost of the raw materials required to produce the log-splitting machines amounts to $50 per unit.
If company management desires a return equal to 10 percent of the final selling price, what is the target unit cost?
Explain what is meant by "qualitative characteristics of accounting information"? Example What are the four basic assumptions that underlie the financial accounting structure? Explain.
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