Rick's Co. currently sells boats for $1,000. it has costs of $600. A competitor is bringing a new boat to the market that will sell for $800. to compete in the market, management believes ot must lower the price to $800. the marketing department believes rhag the new price will cause sales to increase by 20% even with a new competitor in the market. the companys current sales of boats per year are 500 units.

a. what is the target cost for the new target price if the target operating income is 20% of the sales?

b. what is the change in operating imcome if marketing department is correct and only the sales price is changed?

c. what is the target cost if the company wants to maintain its same income level, and marketimg department is correct?