Gimli Enterprises (GE) makes axes for the dwarf lords of Moria and sells them in cases of 30 assorted axes. Although GE makes a variety of axes, the cost differences are insignificant, and the cases all sell for the same price. GE has a total capital investment of $10,000,000. It expects to produce and sell 400,000 cases of axes next year, as demand has gone up because of Orc threats. GE requires a 12% target return on investment. Expected costs for next year are: Variable production costs $3.00 per case Variable marketing and distribution costs $2.00 per case Fixed production costs $400,000 Fixed marketing and distribution costs $700,000 Other fixed costs $500,000 GE prices the cases at full cost plus markup to generate profits equal to the target return on capital. Required: 1. What is the target operating income