Superior Products, Inc. is interested in producing and selling a deluxe electric razor. Market research indicates that customers would be willing to pay $80 for such a razor and that 40,000 units could be sold each year at this price. The current cost to produce the razor is estimated to be $68.

If Superior Products requires a 20% return on sales to undertake production, what is the target cost for the new razor?

Practice Question 15 options:

a)$16

b)$64

c)$54.40

d)$68