Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells as top of the line "ECC" video 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 video 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 video players per year. What is the target cost if target profit is 20% of sales and ECC must meet the competitive price of $220? Multiple Choice $176.00 $190.00 $168.50 $184.25
Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells as top of the line "ECC" video 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 video 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 video players per year. What is the target cost if target profit is 20% of sales and ECC must meet the competitive price of $220? Multiple Choice $176.00 $190.00 $168.50 $184.25
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ee 277.
![Electronic Component Company (ECC) is a producer of high-end video and music equipment ECC currently sells its top of the line "ECC" video 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 video 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 video players per year.
What is the target cost if target profit is 20% of sales and ECC must meet the competitive price of $220?
Multiple Choice
$176.00
$190.00
$168.50
$184.25](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9f13de0d-8ee2-4557-ab0a-aa1afa2929f4%2Fe473cef8-5b17-4649-a90e-6d85235ce03b%2Fgi6ywj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Electronic Component Company (ECC) is a producer of high-end video and music equipment ECC currently sells its top of the line "ECC" video 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 video 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 video players per year.
What is the target cost if target profit is 20% of sales and ECC must meet the competitive price of $220?
Multiple Choice
$176.00
$190.00
$168.50
$184.25
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