Electronic Component Company (ECC) Is a Producer of High-End Video

question 39

Multiple Choice

Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line "ECC" video player for a price of $250. It costs ECC $210 to make the player. ECC's main competitor is coming to market with a new video player that will sell for a price of $220. ECC feels that it must reduce its price to $220 in order to compete. The sales and marketing department of ECC believes the reduced price will cause sales to increase by 15%. ECC currently sells 200,000 video players per year.
What is the target cost if target profit is 20% of sales and ECC must meet the competitive price of $220?

• A) $168.50.
• B) $176.00.
• C) $184.25.
• D) $190.00.

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Definitions:

Neuronal Differentiation

The process by which neurons form from neural stem cells, undergoing changes in shape, size, and function to become specialized nerve cells.

Gestation

The period of development from the fertilization of an egg until birth in mammals, varying in length among different species.

Neurogenesis

the process by which new neurons are formed in the brain.

Gestation

The time of growth from when an egg is fertilized until the organism is born.