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What should be the target cost

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Question - Sharks Inc. produces fishing equipment. A luxury fishing rod, leader in the market, is sold at a price of $ 135.00 per unit and has a production cost of $ 100.00 per unit currently. A close competitor is introducing a product similar to a price of $ 130.00 per unit. Sharks Inc. understands that it must offer the same price of this competitor if it wants to maintain its current level of sales of 200,000 units per year. What should be the target cost if the objective is to earn 22% of the sales price and it wants to sell the product at $ 130.00 per unit?

Reference no: EM133092246

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