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27 April, 18:33

Columbus Inc. sells a high end hair dryer in a super competitive marketplace. As a result, market research and competitive pressures influence the determination of their selling price. Their marketing department has done a comprehensive analysis and It looks like a price of $53 would be appropriate given the present business environment. The company has a goal of earning $26 on each unit. What is the target unit cost of each hair dryer? Enter your answers without dollar signs or commas.

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  1. 27 April, 18:41
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    The hair dryer cost cannot exceed 27 dollars per unit

    Explanation:

    the target cost will the one which achieve the target profit at the selling price of the market.

    In this case we are given that selling price is $53 and we want to achieve a 26 dollar gain per unit therefore:

    revenue - cost = profit

    revneue - profit = cost

    53 - 26 = cost

    cost = 27
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