question 7

Question 7 (3 points) Antman Company uses a target pricing as a price-taker. Refer to the following information: Production volume 601,000 units per year Market price $30per 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, Antman cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs. Assuming that variable costs cannot be reduced, what are the target fixed costs per year? Assume all units produced are sold. $10,818,000 $5,500,000 $4,866,000 $12,530,000