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Determine the target sales price

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Reference no: EM133066254

Question - Leon Company is considering the production and sale of a new product with fixed costs of $32,000 and variable cost of $7 per unit. Based on its normal profit margins. Leon desires to earn a $40,000 profit and believes it can sell 8,000 units of the product.

Required -

1. Based on this information, determine the target sales price.

2. Explain how prestige pricing could be used to increase profitability.

Reference no: EM133066254

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