Paradise Inc estimates that it can sell 50000 of its calcula
Paradise Inc. estimates that it can sell 50,000 of its calculators for $50 each. Assuming a total target profit of $1,000,000, how much is the target cost per calculator?
Solution
Quantity that can be sold = 50000
Target profit = 1000000
Target profit per calculator =Target profit/Total quantity 1000000/50000 = 20
Target cost per calculator = Sales price per calculator - Target cost per calculator
= 50 - 20 = 30
Target cost per calculator is $30.
