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Spring 20 Company is a price-taker and uses target pricing. With the current cost structure, Spring 20 cannot achieve its profit goals. Based on the

Spring 20 Company is a price-taker and uses target pricing. With the current cost structure, Spring 20 cannot achieve its profit goals. Based on the numbers below, assuming that fixed costs cannot be reduced, what should the target variable cost per unit be? Assume all units produced are sold

Production volume per year ------------------------ 300,000
Market selling price per unit ------------------------- $40
Desired operating income as a % of total assets -- 10%
Total assets ---------------------------------------- $15,000,000
Fixed cost per year --------------------------------- $5,500,000
Variable cost per unit -------------------------------- $21

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