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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
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 $700 per unit. The company has $3,000,000 in average assets, and the desired profit is a return of 7% on assets. Assume all products produced are sold. The company provides the following information: Sales volume Variable costs Fixed costs 120,000 units per year $690 per unit $14,000,000 per year If fixed costs cannot be reduced, how much reduction in variable costs will be needed to achieve the desired target? O A. $13,010,000 O B. $82,800,000 O C. $14,000,000 OD. $210,000 Click to select your
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