The target cost if target operating income

Assignment Help Managerial Economics
Reference no: EM13993700

A boat company currently sells motor boats for $6,000. It has costs of $4,650. A competitor is bringing a new motor boat to the market that will sell for $5,500. Management believes it must lower the price to $5,500 to compete in the market for motor boats. Marketing believes that the new price will cause sales to increase by 12.5%, even with a new competitor in the market. The boat company's sales are currently 2,000 motor boats per year. 

Determine the following: 

1. The target cost if target operating income is 25% of sales

2. The change in operating income if marketing is correct and only the sales price is changed

3. The target cost if the company wants to maintain its same income level, and marketing is correct

Reference no: EM13993700

Questions Cloud

What is the power output of the first resistor : What is the power output of the resistor R1? What is the power output of the resistor R2? What is the power output of the resistor R3?
Would you try this scheme for increasing your profits : Review the, "What would you do in this situation?" presented on page 15-25 of your text. Would you try this scheme for increasing your profits? If so, would you escape the scope of Sec. 7206?
Write the c statement needed to arm the port j : 1. Write the C statement needed to arm the Port J interrupt? 2. What does placing asm("cli") at the beginning of an ISR do? 3. Explain what the software interrupt (SWI) does.
What circumstances should employees be ineligible for public : Under what circumstances should employees be ineligible for public or private disability and life benefits? Discuss the rationale for your answer. Are the expenses associated with providing the public and private programs serving the best interests o..
The target cost if target operating income : The target cost if the company wants to maintain its same income level, and marketing is correct, The change in operating income if marketing is correct and only the sales price is changed.
What are the maximum and rms current in the circuit : What are the maximum and rms current in the circuit? What is the phase shift between the voltage and the current?
Summarizing key information and your opinion of the report : Read the PMI report called the "Pulse of the Profession: The High Cost of Low Performance." Write a one-page paper summarizing key information and your opinion of the report."
Does globalization make it hard to compete with nations : Does globalization make it hard to compete with nations that can produce cheeper and faster, like China and India, and are we losing the economic war?
What area the emf of the battery and the current : in the circuit shown in the following figure, the voltage across the R1=6.00 Ω resistor is 22V. What area the emf of the battery and the current through the 6.00 ohm resistor?

Reviews

Write a Review

Managerial Economics Questions & Answers

  The relative effectiveness of fiscal and monetary policy und

Compare the relative effectiveness of fiscal and monetary policy under (a) fixed; (b) free-floating exchange rates. How is the effectiveness influenced by the elasticity of supply of international finance?

  How can firms avoid legal and ethical problems

How can firms avoid legal and ethical problems when setting or changing their prices?

  What does intelligence have to do with leadership

What does intelligence have to do with leadership

  Does mean that the accounting firms are not doing a good job

Does this mean that the accounting firms are not doing a good enough job in auditing? Explain.

  Determine the total output

Two local ready mix cement manufacturers, Here and There, have combined demand given through Q = 105 - P. Their total expenses are given by TC = 5Q + 0.5Q2 and TC = 5Q + 0.5Q2.

  How rapidly has the money supply

How rapidly has the money supply (M1) grown during the past twelve months?

  What is the opportunity cost of your choice explain

Suppose that you have $900 and want to invest the money for one year. Which one will you choose? What is the opportunity cost of your choice? Explain.

  Scores are obtained from the law school admission test

If the top 15% of the test scores are usually good enough for admission to law school, find the cut off score for gaining admission.

  What are the causes of organisational change

What are the causes of organisational change and mention the types of organisational change, the challenges and the steps involved in planning.

  Question about marginal productivity theory

What if a company employs ten workers and pays each $15 each hour. Further suppose that the MP of the 10th worker is five units of output

  Do differences imply that american executives are overpaid

Do these differences imply (1) that American executives are overpaid, and (2) that the form of the compensation in either America or Europe is suboptimal? Explain.

  Production function and factors of production

Production function and Factors of production and Production Possibilities frontier

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd