Ganges Company Makes Bulk Burlap by the Ton

question 13

Multiple Choice

Ganges Company makes bulk burlap by the ton. Currently, their manufacturing cost is $215 per unit, and their non-manufacturing cost is $40 per unit. The going market price of the product is $300. Ganges uses
The target price and target cost methodology. If they desire to make a profit of 20% on the price, what must they do?

• A) Increase the advertising costs by $15 per unit.
• B) Reduce the price they charge by $15 per unit.
• C) Reduce the full-product cost by $60 per unit.
• D) Reduce the full-product cost by $15 per unit.