Polynesian Products sells 1,800 kayaks per year at a price of $480 per unit. Polynesian sells in a highly competitive market and uses target pricing. The company has $900,000 of assets and the shareholders wish to make a profit of 15% on assets. How much is the target full cost?

Question

Quizplus · Accepted Answer

B) Calculations:
1,800 × $480 = $864,000
$900,000 × 15% = $135,000
$864,000 - $135,000 = $729,000

Polynesian Products Sells 1,800 Kayaks Per Year at a Price