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Summit Products, Incorporated is interested in producing and selling an improved widget. Market research indicates that customers would be willing to pay $104 for such
Summit Products, Incorporated is interested in producing and selling an improved widget. Market research indicates that customers would be willing to pay $104 for such a widget and that 62,000 units could be sold each year at this price. The current cost to produce the widget is estimated to be $60.
Summit has learned that a competitor plans to introduce a similar widget at a price of $94. In response, Summit may reduce its selling price to $94. If Summit requires a 15% return on sales, what is the target cost for the new widget?
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