If ABC Company has a 9% ROS, income of P2,160, and an investment turnover of 2.4 times, divisional investment is?

2. ABC Company currently sells a camera for P12,000.  An aggressive competitor has announced plans for a similar product that will be sold for P10,250.  ABC's marketing department believes that if the price is dropped to meet competition, unit sales will increase by 10%.  The current cost to manufacture and distribute the camera is P8,750, and ABC has a profit goal of 20% of sales.  If ABC meets competitive selling prices, what is the company's target cost?

Answer rating: 100% (QA)

1 To calculate the divisional investment we can use the Return on Sales ROS formula ROS Net Income S... View the full answer