fill in the blank question\nabc company is considering an opportunity to produce and sell product x that…

fill in the blank question\nabc company is considering an opportunity to produce and sell product x that currently sells for $20 in the marketplace. if abc wants to earn a 25 percent profit margin on the sales of product x, what is the target cost that must be achieved to compete in the market? target cost = $______\nneed help? review these concept resources.\nread about the concept

fill in the blank question\nabc company is considering an opportunity to produce and sell product x that currently sells for $20 in the marketplace. if abc wants to earn a 25 percent profit margin on the sales of product x, what is the target cost that must be achieved to compete in the market? target cost = $______\nneed help? review these concept resources.\nread about the concept

Answer

Explanation:

Step1: Define profit - margin formula

Profit margin = $\frac{\text{Selling price}-\text{Target cost}}{\text{Selling price}}$ We know that the selling price is $20 and the profit - margin is 0.25. Let the target cost be $C$. So, $0.25=\frac{20 - C}{20}$

Step2: Cross - multiply

$0.25\times20=20 - C$ $5 = 20 - C$

Step3: Solve for $C$

$C=20 - 5$

Answer:

15