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Julian Company is a price-taker and uses target pricing. Refer to the following ...

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Julian Company is a price-taker and uses target pricing. Refer to the following ...

Julian Company is a price-taker and uses target pricing. Refer to the following information:

Production volume   602,000    units per year
Market price   $30    per unit
Desired operating income   17%    of total assets
Total assets   $13,700,000
Variable cost per unit   $18    per unit
Fixed cost per year   $5,400,000    per year

With the current cost structure, Julian 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.)
A) $17.16
B) $5.10
C) $12.00
D) $18.00

Textbook

Horngren's Financial & Managerial Accounting, The Financial Chapters

Edition: 5^th

Authors: Miller-Nobles, Mattison, Matsumura

Read 713 times

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7 years ago

Makes perfect sense, thx

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Mrgo-breed

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7 years ago

I'm liking this Slight Smile

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gigimjax

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4 years ago

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zseales

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3 years ago

Thanks!!!

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Lawanda C.

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3 years ago

Very thorough

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王翊恬

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3 years ago

thank you

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John S.

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3 years ago

thamk you

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