Question: Washington Corporation sells a product for $400 per unit. Its market share is 35 percent of the units sold. The marketing manager believes that the market share can be increased to 40 percent of the units sold with a reduction in price to $350. The product is currently earning a profit of $60 per unit. The president of Washington Corporation believes that his company needs to maintain the same profit level per unit. The total market for the product has annual sales of 12, 500 units.
Required: How many dollars does Washington Corporation currently sell of the product each year?
What is the target price per unit?
What is the target cost per unit?