Question
ABC Company sells 2,000 kayaks per year at a price of $450 per unit. Fantabulous sells in a highly competitive market and uses target pricing.
ABC Company sells 2,000 kayaks per year at a price of $450 per unit. Fantabulous sells in a highly competitive market and uses target pricing. The company has $1,000,000 of assets and the shareholders wish to make a profit of 18% on assets. Fixed costs are $500,000 per year and cannot be reduced.
How much is the target variable costs?
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Microeconomics
Authors: Austan Goolsbee, Steven Levitt, Chad Syverson
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978-1464146978, 1464146977
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