Dennis TV currently sells small televisions for $180. it has costs of $140. A co

Question

Dennis TV currently sells small televisions for $180. it has costs of $140. A compettor is bringing lower the price to $150 to compete Dennis' sales are currenty 100,000 televisions per year a new small television to market that will sell for $150 Management believes it must in the market for smail televisions. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the marke What is the new target cost per unit ifprofit margin is 25% of sales? O A. $135.00 B. $37.50 O C. $112 50 O D. $45.00

Explanation / Answer

C. $112.50

New target cost per unit = $150 - $150(0.25) = $150 - $37.50 = $112.50

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