Acorn Products currently sells small boats for $360. It has costs currently assigned to it...
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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.
What is the target cost if target profit is 25 percent of the competitor's selling price?
Question 8 options:
$75
$270
$90
$225
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