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Dennis' TV currently sells small televisions for $180. It has costs of $140. A competitor...

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Accounting

Dennis' TV currently sells small televisions for $180. It has costs of $140. A competitor is bringing a new small television to market that will sell for $150. Management believes it must lower the price to $150 to compete in the market for small televisions. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market. Dennis' sales are currently 100,000 televisions per year.

What is the target cost per unit if the company wants to maintain its same profit margin in total dollars before the change and Marketing is correct?

A.

$113.64

B.

$123.34

C.

$140.00

D.

$112.50

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