Meson Productions is a

priceminus?taker.

Meson 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

$ 780$780

per unit. The company has

$ 3 comma 000 comma 000$3,000,000

in average? assets, and the desired profit is a return of

44?%

on assets. Assume all products produced are sold. The company provides the following? information:

Sales volume	100 comma 000100,000	units per year
Variable costs	$ 700$700	per unit
Fixed costs	$ 12 comma 000 comma 000$12,000,000	per year

If variable costs cannot be? reduced, how much reduction in fixed costs will be needed to achieve the profit? target?

A.

$ 12 comma 120 comma 000$12,120,000

B.

$ 12 comma 000 comma 000$12,000,000

C.

$ 4 comma 000 comma 000$4,000,000

D.

$ 4 comma 120 comma 000$4,120,000