Ignite Products is a price-taker. The company produces large spools of electrical wire in a highly competitive market; thus, it uses target pricing. The current market price of the electric wire is $800 per unit. The company has $3,200,000 in average assets, and the desired profit is a return of 8% on assets. Assume all products produced are sold. The company provides the following information: Sales volume Variable costs Fixed costs O A $12,000,000 B. $71,000,000 100,000 $710 OC. $256,000 O D. $3,256,000 units per year per unit If fixed costs cannot be reduced, how much reduction in variable costs will be needed to achieve the desired target? $12,000,000 per year

Ignite Products is a price-taker. The company produces large spools of electrical wire in a highly competitive market; thus, it uses target pricing. The current market price of the electric wire is $800 per unit. The company has $3,200,000 in average assets, and the desired profit is a return of 8% on assets. Assume all products produced are sold. The company provides the following information: Sales volume Variable costs Fixed costs O A $12,000,000 B. $71,000,000 100,000 $710 OC. $256,000 O D. $3,256,000 units per year per unit If fixed costs cannot be reduced, how much reduction in variable costs will be needed to achieve the desired target? $12,000,000 per year

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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