Equival company wishes to sell truck axles to car, Ask an Expert

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Equival Company wishes to sell truck axles to car manufacturers. The current market price of the axles is $400, and Equival knows it must accept the market price. Currently, it costs the company $330 to produce each axle. The company wishes to make a profit equal to 20% of the price. Which of the following strategies should Equival adopt to achieve its objective?

1) Raise the price to $410.

2) Reduce its production costs by $10 per unit.

3) Increase the production costs by $20 per unit.

4) Use advertising to increase the volume of sales.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M956435

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