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Kerr Productions is a price-taker. The company produces large spools of electrical wire in a highly competitive market: thus, it uses target pricing. The curent
Kerr Productions is a price-taker. The company produces large spools of electrical wire in a highly competitive market: thus, it uses target pricing. The curent market price is $825 per unit. The company has $3,000,000 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 110,000 units per year ariable cosls Fixed costs $725 per unit $13,cc0,000 per year Currenty the cost structure is suchtha the coripany cannol achieve ils profit objective and must cut osls. I ixed costs cannot nearest cent.) reduced, how much ucti in variable cost per uril will be nccded to achieve the desired larget? (Rournd your answer to the O A. reduction in variable oost per unit by 5100.00 B. reduction in variable oost per unit by $19.82 O c. reduction in varlable cost per unit by $T25.00 O D. reduction in variable cost per uri by $18.18
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