Outrigger Leisure Products Sells 2200 Kayaks Per Year at a Price

question 91

Multiple Choice

Outrigger Leisure Products sells 2200 kayaks per year at a price of $450 per unit.Outrigger sells in a highly competitive market and uses target pricing.The company has $1,000,000 of assets and the shareholders wish to make a profit of 17% on assets.Fixed costs are $450,000 per year and cannot be reduced.Assume all products produced are sold.What are the target variable costs?

• A) $139,401
• B) $1,000,000
• C) $820,000
• D) $370,000

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Definitions:

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