question 8

Question 8 (3 points) Wasp Company uses a target pricing as a price-taker. Refer to the following information: Production volume 600,000 units per year Market price $30 per unit Desired operating income 15% of total assets Total assets $13,800,000 Variable cost per unit $20 per unit Fixed cost per year $5,400,000 per year With the current cost structure, Wasp cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs. Assuming that fixed costs cannot be reduced, what are the target variable costs per unit per year? Assume all units produced are sold. (Round your answer to the nearest cent.) $20.00 $17.55 $4.50 $10.00