Franco Electronics currently sells a camera for $300. An aggressive competitor has announced plans for a similar product that will be sold for $235. Franco's marketing department believes that if the price is dropped to meet competition, unit sales will increase by 10%. The current cost to manufacture and distribute the camera is $205, and Franco has a profit goal of 30% of sales. If Franco meets competitive selling prices, what is the company's target cost?
The following costs relate to ABC Company: Variable manufacturing cost, $34; variable selling and administrative cost, $12; applied fixed manufacturing overhead, $19; and allocated fixed selling and administrative cost, $8. If ABC uses absorption manufacturing-cost pricing formulas, the company's markup percentage would be computed on the basisa. a)34 b)53 c) 46 D)73 E)None