Labriola Component Company (ECC) is a producer of high-end video and music equipment. ECC currently sells its top of the line "ECC" DVD player for a price of $250. It costs ECC $210 to make the player. ECC's main competitor is coming to market with a new DVD player that will sell for a price of $220. ECC feels that it must reduce its price to $220 in order to compete. The sales and marketing department of ECC believes the reduced price will cause sales to increase by 15%. ECC currently sells 200,000 DVD players per year.

Irrespective of the competitor's price, what is Studebaker's required selling price if the target profit is 25% of sales and current costs cannot be reduced?

What is the target cost if target profit is 20% of sales and Studebaker must meet the competitive price of $220?

Assuming sales and marketing are not correct in their estimation and the volume of sales is not changed and Studebaker meets the competitive price, what is the target cost if ECC wants to maintain its same income level?