Blair Stationery Company is a price taker and uses target pricing. The company h

Question

Blair Stationery Company is a price taker and uses target pricing. The company has just done an analysis of its d revenues, costs, and desired profits and 'has calculated its target full Product cost. Assume all products produced are sold. Refer to the following information n Target full product cost Actual fixed cost Actual variable cost Production volume $510,000 per year $260,000 per year $3 per unit 151,000 units per year Actual costs are currently higher than target full product cost. Assuming that fixed costs cannot be reduced, what are the target total variable costs? Select one eA. $510000 B. $250,000 ic. $260,000 D. $453,000

Explanation / Answer

Answer:-The target total variable costs are $250000 (option B).

Explanation:- Total target product cost =$510000 per year

Actual fixed costs = $260000 per year

Target total variable costs = Total target product cost - Actual fixed costs

= $510000 - $260000

=$250000

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