Todd Ltd. sells a product for £400 per unit. Its market share is 22 percent of the units sold. The marketing manager feels that the market share can be increased to 28 percent of the units sold with a reduction in price to £340. The product is currently earning a profit of £64 per unit. The president of Todd Ltd. feels that his company needs to maintain the same profit level per unit. The market share consists of £4,000,000 (10,000 units).
Required:
a.
How many units does Todd Ltd. currently sell of the product?
b.
What is the target price per unit?
c.
What is the original cost per unit?
d.
What is the target cost per unit?

Question

Quizplus · Accepted Answer

The Answer of Todd Ltd. sells a product for £400 per unit. Its market share is 22 percent of the units sold. The marketing manager feels that the market share can be increased to 28 percent of the units sold with a reduction in price to £340. The product is currently earning a profit of £64 per unit. The president of Todd Ltd. feels that his company needs to maintain the same profit level per unit. The market share consists of £4,000,000 (10,000 units).
Required:
a.
How many units does Todd Ltd. currently sell of the product?
b.
What is the target price per unit?
c.
What is the original cost per unit?
d.
What is the target cost per unit?

Todd Ltd Sells a Product for £400 Per Unit