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Question
Martin Manufacturers produces 3 models of industrial hammers. Martin uses the target pricing approach. The company's objective is to achieve gross profit equal to 40% of selling price. Other data are shown below:
Current production cost $42.50 per unit
Current market price $60.00 per unit
What must the company do to achieve their profit goal? (Please round all amounts to the nearest cent.)
A) Reduce production cost by $6.50 per unit.
B) Increase price by $0.50 per unit.
C) Reduce production cost by $4.20 per unit.
D) Increase price by $6.50.
Answer
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