Sparks Stationery Company Is a Price-Taker and Uses Target Pricing

question 153

Multiple Choice

Sparks Stationery Company is a price-taker and uses target pricing.The company has just done an analysis of its revenues,costs,and desired profits and has calculated its target full product cost.Assume all products produced are sold.Refer to the following information:

Actual costs are currently higher than target full product cost.Assuming that fixed costs cannot be reduced,what is the target variable cost per unit? (Round your answer to the nearest cent. )

• A)$3.40
• B)$1.53
• C)$1.87
• D)$2.00