Electronic Component Company Is a Producer of High-End Video and Music

question 10

Multiple Choice

Electronic Component Company is a producer of high-end video and music equipment.ECC currently sells its top of the line "ECC" DVD 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 DVD 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 DVD 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.
• 0)8 x $220 = $176.00

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