The firm in Brief Exercise 13-20 ignores competitive prices because it has a differentiated product. It uses full manufacturing cost–based pricing with a 40% markup. What is the firm’s price? Exercise...

The firm in Brief Exercise 13-20 ignores competitive prices because it has a differentiated product. It uses full manufacturing cost–based pricing with a 40% markup. What is the firm’s price?

Exercise 13-20~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The market price for a product has been $50 per unit, but competitive pressures have reduced the market price to $45. The firm manufactures 10,000 of these products per year at a manufacturing cost of $38 per unit (including $22 fixed cost and $16 variable cost per unit). Other selling and administrative costs for the product are $8 per unit. What is the firm’s target manufacturing cost for this product if the profit per unit is to remain unchanged?