Olena Corporation sells a product for $500 per unit. Its market share is 20 percent. The marketing manager believes that the market share can be increased to 30 percent with a reduction in price to $400. The product is currently earning a profit of $50 per unit. The president of Olena Corporation believes that the $50 profit per unit must be maintained.
Calculate the target cost per unit?

Question

Olena Corporation sells a product for $500 per unit. Its market share is 20 percent. The marketing manager believes that the market share can be increased to 30 percent with a reduction in price to $400. The product is currently earning a profit of $50 per unit. The president of Olena Corporation believes that the $50 profit per unit must be maintained. 
Calculate the target cost per unit?

Quizplus · Accepted Answer

The Answer of Olena Corporation sells a product for $500 per unit. Its market share is 20 percent. The marketing manager believes that the market share can be increased to 30 percent with a reduction in price to $400. The product is currently earning a profit of $50 per unit. The president of Olena Corporation believes that the $50 profit per unit must be maintained. 
Calculate the target cost per unit?

Olena Corporation Sells a Product for $500 Per Unit