Chris Company sells a product for £225 per unit. Its market share is 20 percent. The marketing manager feels that the market share can be increased to 30 percent with a reduction in price to £195. The product is currently earning a profit of £36 per unit. The president of Chris Company feels that the £36 profit per unit must be maintained. What is the target cost per unit?
A) £225
B) £195
C) £189
D) £159

Question

Quizplus · Accepted Answer

To maintain a profit of £36 per unit at the new price of £195, the target cost per unit must be £195 - £36 = £159.

Chris Company Sells a Product for £225 Per Unit