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Block Island TV currently sells large televisions for $380. It has costs of $290. A competitor...

Block Island TV currently sells large televisions for $380. It has costs of $290. A competitor is bringing a new large television to market that will sell for $310. Management believes it must lower the price to $310 to compete in the market for large televisions. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market. Block Island TV sales are currently 110,000 televisions per year. What is the target cost per unit if target operating income is 35% of sales?

A) $108.50

B) $133.00

C) $201.50

D) $247.00
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Answer #1

Answer: ()$201.50 . Explanation: sale price =$310 1. Operating Income = 35% of $310 . .= $ 108.50 Hence, . Targes cost =$310-

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