Doug Dixon, majority stockholder and president of Dixon, Inc., is working with his top managers on future plans for the company. As thecompany's managerialaccountant, you've been asked to analyze the following situations and make recommendations to the management team.

Division A of Dixon, Inc. has $5,000,000 in assets. Its yearly fixed costs are $684,000, and the variable costs of its product line are $1.35 per unit. Thedivision's volume is currently 520,000 units. Competitors offer a similarproduct, at the samequality, to retailers for $3.60 each. Dixon's management team wants to earn a 10% return on investment on thedivision's assets.

1a. What is DivisionA's target full productcost?