Gotham Products Is a Price-Taker and Uses Target Pricing How Much Is the Target Full Product Cost Per Year

question 160

Multiple Choice

Gotham Products is a price-taker and uses target pricing. Please refer to the following information: $$\begin{array} { | l | r | l | } \hline \text { Production volume } & 300,000 & \text { units per year } \\\hline \text { Market price } & \$ 3 & \text { per unit } \\\hline \text { Desired operating income } & 15 \% & \text { of total assets } \\\hline \text { Total assets } & \$ 2,000,000 & \\\hline\end{array}$$ How much is the target full product cost per year? Assume all units produced are sold.

• A) $900,000
• B) $600,000
• C) $300,000
• D) $390,000

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