Explore Westonci.ca, the leading Q&A site where experts provide accurate and helpful answers to all your questions. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

Question Content Area Flyer Company sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $48 per unit. Flyer's management desires a 12.5% profit margin on sales. Its current full cost for the product is $44 per unit. In order to meet the new target cost, how much will Flyer have to cut costs per unit, if any

Sagot :

Flyer would have to cut $2 per unit  in order to meet the new target cost.

What is target cost?

The target cost of a product is the expected selling price of the product minus the desired profit from selling

First, we need to get the target cost

= Target Selling price per unit - Target profit per unit

= $48 - ($48 x 0.125)

= $48 - $6

= $42

Then,  Flyer have to cut costs per unit

= Cost for product - Target cost

= $44 - $42

= $2

Hence, Flyer would have to cut $2 per unit  in order to meet the new target cost.

Learn more about target costs here: https://brainly.com/question/15237816

#SPJ1