Well-Bread Grain Company is a price-taker and uses target pricing. The company has just done an analysis of its revenues, costs, and desired profits and has calculated its target full product cost. Assume all products produced are sold. Refer to the following information:

 

Target full product cost	$520,000	per year
Actual fixed cost	$281,000	per year
Actual variable cost	$2	per unit
Production volume	150,000	units per year

 

Actual costs are currently higher than the target full product cost. Assuming that fixed costs cannot be reduced, what is the target variable cost per unit? (Round your answer to the nearest cent.)

A) $3.47

B) $1.59

C) $1.87

D) $2.00

Answer rating: 100% (QA)

Answer B 159 Explanation Target ... View the full answer