1. Maple Company uses a target-costing approach to establish the product price amd provides the following information:

Production volume	601,000	units per year
Market price	$30	per unit
Desired operating income	17%	of total assets
Total assets	$13,800,000
Variable cost per unit	$18	per unit
Fixed cost per year	$5,500,000	per year

With the current cost structure, Maple cannot achieve its profit goals. Assuming that variable costs cannot be reduced, what are the target fixed costs per year? Assume all units produced are sold.

Select one:

A.

$10,818,000

B.

$5,500,000

C.

$12,530,000

D.

$4,866,000