Flyer Company sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Flyer's current full cost for the product is $44 per unit.
-In order to meet the new target cost, how much will the company have to cut costs per unit, if any?
A)$1
B)$3
C)$2
D)$0

Question

Flyer Company sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Flyer's current full cost for the product is $44 per unit.​
-In order to meet the new target cost, how much will the company have to cut costs per unit, if any?
A)$1
B)$3
C)$2
D)$0

Quizplus · Accepted Answer

The Answer of Flyer Company sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Flyer's current full cost for the product is $44 per unit.​
-In order to meet the new target cost, how much will the company have to cut costs per unit, if any?
A)$1
B)$3
C)$2
D)$0

Flyer Company Sells a Product in a Competitive Marketplace