Dennis' TV Currently Sells Small Televisions for $180

Multiple Choice

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 new target cost per unit if profit margin is 25% of sales?

A) $37.50
B) $45.00
C) $112.50
D) $135.00