Meson Productions is a price-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

$770

per unit. The company has

$3,200,000

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

33%

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

Sales volume	120,000	units per year
Variable costs	$720	per unit
Fixed costs	$14,000,000	per year

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

A.

$14,096,000

B.

$8,096,000

C.

$14,000,000

D.

$8,000,000