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Dmitriy789 [7]
2 years ago
9

Blanchard, Inc., is considering introducing a new product and wants to earn a 15% return on sales. If the market price is estima

ted to be $200, the most the company can spend and still achieve the goal (the target cost) is
Business
1 answer:
r-ruslan [8.4K]2 years ago
8 0

Answer:

$170

Explanation:

If the goal is to achieve a 15% return on sales, Blanchard Inc., can afford to spend at most 85% of the estimated price ($200) on the production of the new product. Therefore, the target cost is:

C = 0.85*\$200\\C=\$170

The target cost is $170.

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Hope this helps you :)

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