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

Selling price per unit = Target cost per unit + Markup
$5 = Target cost per unit + ($5 per unit x 0.20)
Target cost per unit = $5 - ($5 x 0.20)= $4 per unit

A Market Research Specialist Told Peachtree Company That It Could