Harry's Co. recently implemented an activity-based costing system. As a result of the ABC allocations, the cost of one of the company's products was determined to be above its current selling price. Due to competition, the company is unable to raise the price of this product. Which of the following options is most reasonable, assuming Harry's Co. employs a target pricing strategy? A. Raise prices under the assumption that the company's competitors will follow suit. B. Return to the old allocation method, which produces a lower amount of estimated cost. "C. Use less expensive materials to make the product. Target advertising to high-income customers.
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Home » Business » Harry's Co. recently implemented an activity-based costing system. As a result of the ABC allocations, the cost of one of the company's products was determined to be above its current selling price.