Exercise $19\mathrm{.}12($Static$)$ Target Costing at Pizza Pies Limited $($LO $19-4,19-5)$

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Pizza Pies Limited has the following value chain for its pizzas. Boxes are designed by Shala Designers Inc. and printed and delivered by Rodoes Printing Co$.$ for $$0\mathrm{.}95$ per box. The pizzas are made in the stores with fresh ingredients and baked in the ovens for a total cost of $$3\mathrm{.}80,$ including labor, ingredients, and overhead. The pizza delivery costs $$1\mathrm{.}35.$ Pizza Pies needs to reduce the price of its pizza to $$6\mathrm{.}50$ to meet local demand. However, it desires a $10$ percent markup for profit.

Exercise $19\mathrm{.}12($Static$)$ Part a$-1$

a$-1.$ What is the target cost? $($Round your answer to $2$ decimal places.$)$