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  3. 2. phillips company can sell 15,000 units of its n

2. Phillips Company can sell 15,000 units of its new product at a selling price...

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Accounting

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2. Phillips Company can sell 15,000 units of its new product at a selling price of $116. The unit cost is $72. The company's target profit is 40% of sales. The Vice President of Marketing has learned that a competitor plans to introduce a similar product for $104. T Vice President has recommended that Phillips match the competitor's price. She believes the lower selling price will increase sales volume by 20%. Required: 1) Compute the company's net income assuming the product is sold for $116 and the costs remain at $72. Assume there were no additional costs. 2) Compute the product's target cost if it is sold at a $116 selling price. 3) Compute the company's net income if the target cost computed in Requirement 2 is achieved. 4) Compute the change in income from Requirement 1 if the product is sold for $104, costs remain at $72, and volume is increased by 20%

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