Mojave Corporation manufactures a single product that has a cost of $350. The company uses a 70% markup on cost to arrive at a selling price of $595, which results in a price that virtually always exceeds that of the market leaders. If Mojave changes to the approach known as target costing, the company will first:

reduce its 70% markup rate.

trim its $350 cost.

attempt to re-engineer its product.

undertake a thorough study of competitors' prices.

change the markup so that it is based on sales rather than based on cost