Polo manufactures a product that has a price of $50.00. It has costs of $36 per...

Transcribed Image Text:

Polo manufactures a product that has a price of $50.00. It has costs of $36 per unit. A competitor is introducing a new product that will sell for $42.00. Management believes it must lower the price to $42.00 to compete in the highly cost-conscious market. Marketing department believes that the new price will allow Polo to maintain the current sales level of 150,000 units per year. What is the target cost per unit for the new price if target operating income is 30% of sales? Polo manufactures a product that has a price of $50.00. It has costs of $36 per unit. A competitor is introducing a new product that will sell for $42.00. Management believes it must lower the price to $42.00 to compete in the highly cost-conscious market. Marketing department believes that the new price will allow Polo to maintain the current sales level of 150,000 units per year. What is the target cost per unit for the new price if target operating income is 30% of sales?

Answer rating: 100% (QA)

To determine the target cost per unit for the new price of 4200 while maintainin... View the full answer