Airflow Company Sells a Product in a Competitive Marketplace

question 82

Essay

Airflow Company sells a product in a competitive marketplace.Market analysis indicates that the product would probably sell at $28.00 per unit.Airflow management desires a profit equal to a 20% rate of return on invested assets of $1,400,000.Airflow anticipates selling 50,000 units.The current full cost per unit for the product is $25 per unit.
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(a)What is the amount of profit per unit?
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(b)What is the target cost per unit if Airflow meets the market dictated price and management's desired profit?

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Definitions:

Medicare

A federal health insurance program in the United States primarily for people who are 65 or older, as well as for some younger people with disabilities or specific conditions.

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programs or coverage provided by the national government to protect citizens against specific risks like unemployment, health issues, or retirement.

Aged 65

Refers to individuals who are 65 years old or older, often considered a benchmark age for 'elderly' or 'senior' status in many societal contexts.

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A type of health insurance plan that offers a network of healthcare providers to its members at discounted rates.