Clark Manufacturing makes blank CDs; it is a very competitive market and the company follows a target pricing strategy. Currently the market price for a unit of product (one unit equals a package of 100 CDs) is $18.00. Clark's production costs are shown below: 
Clark uses activity-based costing for its indirect production costs and provides the following information about this particular product:
The company's objective is to earn 5% profit on the sales price of the product. Based on the above data, how much cost reduction does the company need to achieve its objective?
Definitions:
Transform Objects
The act or process of changing the form, appearance, or function of objects, often through creative or imaginative efforts.
Crystallized Intelligence
Represents the facet of intelligence involving the ability to use learned knowledge and experience.
Capital
The wealth, whether in money or assets, that is used or invested to generate more wealth.
Gardner's Theory
Refers to Howard Gardner's theory of multiple intelligences, which proposes that people have different kinds of intelligences, such as linguistic, logical-mathematical, and musical, among others.
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