Rica Company Is a Price-Taker and Uses Target Pricing

question 51

Multiple Choice

Rica Company is a price-taker and uses target pricing.Refer to the following information:
- With the current cost structure,Rica cannot achieve its profit goals.It will have to reduce either the fixed costs or the variable costs.Assuming that variable costs cannot be reduced,what will be the target fixed costs per year? Assume all units produced are sold.

• A)$5,115,000
• B)$5,600,000
• C)$10,315,000
• D)$5,200,000

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Definitions:

Locomotion

Movement from one place to another.

Gross Motor Skills

Physical abilities that involve large muscle activities such as walking, running, jumping, and climbing.

Large Muscle Groups

Collections of muscles in the body that contribute to major movements, such as those in legs, back, and chest.

Physical Play

Activities that engage the body in movement and play, promoting physical fitness, coordination, and motor skills in individuals.