Shredder Inc.produces paper shredders.Shredder is considering a new shredder design for home offices.The marketing vice president believes that a basic unit in a variety of attractive colours could be sold for $100.Shredder requires that all new products yield 35% profit.What is the target cost of the new shredder?

Question

Quizplus · Accepted Answer

To find the target cost, we need to subtract the desired profit margin from the expected sales price:

$100 - (35% x $100) = $65

Therefore, the target cost of the new shredder is $65.