A market research specialist told Peachtree Company that it could expect to sell 500,000 units of its new high-capacity computer disk at a price of $5.Assuming the company desires a profit margin equal to 20% of sales,what target cost per unit is necessary?

Question

Quizplus · Accepted Answer

To calculate the target cost per unit, we need to first calculate the desired profit margin per unit, which is 20% of the selling price of $5, or $1.
Target cost per unit = Selling price per unit - Desired profit margin per unit
= $5 - $1
= $4. Therefore, the correct choice is (B).

A Market Research Specialist Told Peachtree Company That It Could