Trina Productions is a price-taker. The company produces large spools of electrical wire in a highly competitive market; thus, it uses target pricing. The current market price of the electric wire is

$ 800

per unit. The company has

$3,000,000

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

8%

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

Sales volume	100,000	units per year
Variable costs	$710	per unit
Fixed costs	$12,000,000	per year

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