Travis Corporation sells a product for $100 per unit. Its market share is 32 percent. The market share can be increased to 40 percent with a reduction in price to $87. The product is currently earning a profit of $23 per unit. The president of Travis Corporation feels that the company needs to maintain the same profit level per unit. The total market consists of $1,000,000 (10,000 units).
Compute the following items:
(1) How many units does Travis Corporation currently sell of the product? __________
(2) What is the target price per unit? __________
(3) What is the original cost per unit? __________
(4) What is the target cost per unit? _____

Question

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The Answer of Travis Corporation sells a product for $100 per unit. Its market share is 32 percent. The market share can be increased to 40 percent with a reduction in price to $87. The product is currently earning a profit of $23 per unit. The president of Travis Corporation feels that the company needs to maintain the same profit level per unit. The total market consists of $1,000,000 (10,000 units).
Compute the following items:
(1) How many units does Travis Corporation currently sell of the product? __________
(2) What is the target price per unit? __________
(3) What is the original cost per unit? __________
(4) What is the target cost per unit? _____

Travis Corporation Sells a Product for $100 Per Unit