Answer the Following Questions Using the Information Below

question 40

Multiple Choice

Answer the following questions using the information below:
Ace Books Company currently sells eBook readers for $270.It has costs of $210.A competitor is bringing a new eBook reader to market that will sell for $225.Management believes it must lower the price to $225 to compete in the market for eBook readers.Marketing believes that the new price will cause sales to increase by 10%,even with a new competitor in the market.Ace's sales are currently 10 000 eBook readers per year.
-What is the target cost if operating profit is 25% of sales?

• A)$56.25
• B)$202.50
• C)$168.75
• D)$67.50

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Definitions:

Semiconductors

Materials with electrical conductivity between that of a conductor and an insulator, used in the manufacture of electronic devices.

Foreign Country

A nation-state or territory that is recognized as independent and distinct from one's own country, governed by its own political and legal systems.

Mechanical Engineer

A professional engineer who designs, analyzes, and maintains mechanical systems.

Fossil Fuel

A natural fuel such as coal, oil, or natural gas, formed in the geological past from the remains of living organisms.