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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 $800 per unit. The company has $3,100,000 in average assets, and the desired profit is a return of 6% on assets. Assume all products produced are sold. The company provides the following information: Sales volume Variable costs Fixed costs 100.000 units per year $690 per unit $13,000,000 per year If fixed costs cannot be reduced, how much reduction in variable costs will be needed to achieve the desired target? O A. $2,186,000 B. $13,000,000 O C. $186,000 OD. $69,000,000
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