J-Time,Inc.is planning to launch a new brand of watches for kids.Similar watches are available in the market for $58.In order to penetrate the market,the company plans to use target pricing and desires a 22% net profit markup on total cost.Calculate the target cost.(Round your answer to the nearest cent. )
A)$70.76
B)$12.76
C)$47.54
D)$45.24

Question

Quizplus · Accepted Answer

C)
Let target cost be x
Target cost = Target sales price - Desired profit
x = $58 - 0.22x
1.22x = $58
x = $58 / 1.22
x = $47.54