27

Bosworth Boots, Inc. is considering the production of a new line of boots. Based on preliminary market research, management has decided that each pair of boots should be priced at $225. Furthermore, management believes that the profit margin should be 30 percent of sales revenue. What is the target cost?

$150.75

$225.50

$260.00

$157.50

28

Assume that EEG Company wanted to reduce the cost of materials handling in each of its stores, and management set a target reduction of 2 percent per year. If a given store has current annual materials handling costs of $200,000 and expected an increase next year due to 15 percent growth, the budget for next year would be:

	$216,000
	$196,000
	$230,000
	$225,400

5 points