Question

​Nourishmix, Inc. manufactures food processors. The target sales price is​ $420 per unit. The company desires a​ 30% net profit margin on its products. What is the​ company's target fullminus−product cost per unit using target​ pricing?

A. $126
B. $714
C. $294
D. $546

Answer 1

C. $294

Step-by-step explanation:

The computation of the company's target full - product cost per unit is shown below:

= Target sale price - target sale price × net profit margin

= $420 - $420 × 30%

= $420 - $126

= $294

Simply we deduct the targeted net profit from the targeted sales price so that the accurate target full - product cost per unit can come.