Maple Company uses a target$-$costing approach to establish the product price amd provides the following information:

Production volume $601,000$ units per year

Market price $$30$ per unit

Desired operating income $17\%$ of total assets

Total assets $$13,800,000$

Variable cost per unit $$18$ per unit

Fixed cost per year $$5,500,000$ per year

With the current cost structure, Maple cannot achieve its profit goals. Assuming that variable costs cannot be reduced, what are the target fixed costs per year? Assume all units produced are sold.

Answer rating: 100% (QA)

To determine the target fixed costs per year we need to calculate the desired operating inco... View the full answer