Nemesis Company manufactures water skis. Nemesis pursues a target pricing strategy. Please review the data below:
$$\begin{array} { l l }
\text { Current market price } & \$ 180 \text { per pair } \
\text { Current manufacturing cost } & \$ 110 \text { per pair } \
\text { Current non-manufacturing cost } & \$ 25 \text { per pair } \
\text { Desired profit } & 30 \% \text { of price }
\end{array}$$
-
Which of the following represents the target cost?

Question

Nemesis Company manufactures water skis. Nemesis pursues a target pricing strategy. Please review the data below:
$$\begin{array} { l l } 
\text { Current market price } & \$ 180 \text { per pair } \
\text { Current manufacturing cost } & \$ 110 \text { per pair } \
\text { Current non-manufacturing cost } & \$ 25 \text { per pair } \
\text { Desired profit } & 30 \% \text { of price }
\end{array}$$
-
Which of the following represents the target cost?

Quizplus · Accepted Answer

The target cost is calculated by subtracting the desired profit from the current market price. Desired profit is 30% of $180, which is $54. Therefore, the target cost is $180 - $54 = $126.

Nemesis Company Manufactures Water Skis - Which of the Following Represents the Target Cost? A)

Nemesis Company Manufactures Water Skis -
Which of the Following Represents the Target Cost?
A)