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Colt1911 [192]
3 years ago
13

Columbus Inc. sells a high end hair dryer in a super competitive marketplace. As a result, market research and competitive press

ures influence the determination of their selling price. Their marketing department has done a comprehensive analysis and It looks like a price of $53 would be appropriate given the present business environment. The company has a goal of earning $26 on each unit. What is the target unit cost of each hair dryer? Enter your answers without dollar signs or commas.
Business
1 answer:
soldier1979 [14.2K]3 years ago
3 0

Answer:

The hair dryer cost cannot exceed 27 dollars per unit

Explanation:

the target cost will the one which achieve the target profit at the selling price of the market.

In this case we are given that selling price is $53 and we want to achieve a 26 dollar gain per unit therefore:

revenue - cost = profit

revneue - profit = cost

53 -26 = cost

cost = 27

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