Electronic Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line "ECC" video player for a price of $350. It costs ECC $260 to make the player. ECC's main competitor is coming to market with a new video player that will sell for a price of $320. ECC feels that it must reduce its price to $320 in order to compete. The sales and marketing department of ECC believes the reduced price will cause sales to increase by 21%. ECC currently sells 210,000 video players per year.

What is the target cost if target profit is 22% of sales and ECC must meet the competitive price of $320?

Multiple Choice

• $263.60.
• $242.10.
• $257.85.
• $249.60.