Entertech Company is designing a tablet aimed at families travelling with young children. The company believes that the product can be sold for $150, and it requires a 25% profit on new products. What is the target cost of the tablet?
A) $28.00
B) $112.50
C) $140.00
D) $187.50

Question

Quizplus · Accepted Answer

The target cost can be calculated by subtracting the desired profit margin from the expected selling price: 
$150 x 0.25 = $37.50 (desired profit)
$150 - $37.50 = $112.50 (target cost) 
Therefore, the best choice is B.

Entertech Company Is Designing a Tablet Aimed at Families Travelling