Product X sells for $80 per unit in the marketplace and ABC Company requires a 35% minimum profit margin on all product lines.In order to compete in this market, the target cost for Product X must be equal to or lower than:
A)$28.
B)$45.
C)$52.
D)$80.

Question

Quizplus · Accepted Answer

To achieve a 35% profit margin on a selling price of $80, the cost must be 65% of the selling price. Therefore, the target cost is 65% of $80, which is $52.

Product X Sells for $80 Per Unit in the Marketplace