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Electron Manufacturing is a price - taker. Electron produces large spools of electrical wire in a highly competitive market; thus, the company uses target pricing.
Electron Manufacturing is a price - taker. Electron produces large spools of electrical wire in a highly competitive market; thus, the company uses target pricing. The current market price of the electric wire is $760 per unit. The company has $3,100,000 in average assets, and the desired profit is a return of 4% on assets. Assume all products produced are sold. The company provides the following information 110,000 units per year Sales volume Variable costs $660 per unit $14,000,000 per year Fixed costs If variable costs cannot be reduced, how much reduction in fixed costs will be needed to achieve the profit target? O A. $14,124,000 O B. $3,124,000 O C. $14,000,000 O D. $3,000,000
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