Question

Columbus Inc. sells a high end hair dryer in a super competitive marketplace. As a result, market research and competitive pressures influence the determination of their selling price. Their marketing department has done a comprehensive analysis and It looks like a price of $69 would be appropriate given the present business environment. The company has a goal of earning $34 on each unit. What is the target unit cost of each hair dryer? Enter your answers without dollar signs or commas.

Answer 1

Answer: $35

Step-by-step explanation:

Since $69 is what the company feels they can charge in this business environment but also want to make a profit of $34 per unit, the answer can be gained by subtracting the preferred profit from the estimated selling price.

= 69 - 34

= 35

If the company wants to get a $34 profit on each hair dryer, they should have at most a cost of $35 per unit.

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