Essay
Airflow Company sells a product in a competitive marketplace.Market analysis indicates that the product would probably sell at $28.00 per unit.Airflow management desires a profit equal to a 20% rate of return on invested assets of $1,400,000.Airflow anticipates selling 50,000 units.The current full cost per unit for the product is $25 per unit.
(a)What is the amount of profit per unit?
(b)What is the target cost per unit if Airflow meets the market dictated price and management's desired profit?
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(a)$28.00 - $25.00 = $3.00 (...View Answer
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