Quality believes that there is a market for a portable electronic toothbrush that can be easily carried by business travellers. Quality’s market research department has surveyed the features and prices of electronic brushes currently on the market. Based on this research, Quality believes that $70 would be about the right price. At this price, marketing believes that about 80,000 new portable brushes can be sold over the product’s life cycle. It will cost about $1,000,000 to design and develop a portable brush. Quality has a target profit of 20 percent of sales.
Determine the total and unit target cost to manufacture, sell, distribute, and service each portable brush.
