Your company designed an ergonomic snow shovel that costs $15 to make. Your company wants to earn a 20% margin, and competitors are pricing comparable snow shovels at $17. Using the target-cost pricing strategy, how much should your company charge for the snow shovel?

 
 
 
 
 
 

Lowering costs in order to match competitors’ prices is a way of setting costs and prices based on a target-cost pricing strategy.