Acorn Products currently sells small boats for $360. It has costs currently assigned to it of $280. A competitor is bringing a new small boat to market that will sell for $300. Management believes it must lower the price to $300 to compete in the market for small boats. Marketing believes that the new price will cause sales to increase by 10 percent, even with a new competitor in the market. Acorn's sales are currently 100,000 per year.

13) What is the target cost if target profit is 25 percent of the competitor's selling price?

  

14) Under cost-plus pricing, what is the required selling price to achieve a 15% markup?

  

15) What is Acorn's target selling price if costs cannot be reduced and target profit is changed cost plus 20 percent?

  

16) What is Acorn's target cost if the company wants to maintain its same income level, and marketing is correct?

 

Answer rating: 100% (QA)

SOLUTION 13 The target cost if target profit is 25 percent of the competitors selling price can be c... View the full answer