Fulford Company applies the target pricing and costing approach. The following information about costs and revenues of Fulford’s product are available for the year just ended: Fulford plans to increase unit sales to 80,000 by reducing the product’s unit price to US $320. If Fulford desires a unit target operating income of 12CYo, by what amount must it reduce the full cost per unit?
A. US $32.00
B. US $38.40
C. US $70.40
D. US $80.00
Answer:C
Fulford Company applies the target pricing and costing approach. The following information about costs and revenues of Fulford’s product are available for the year just ended: Fulford plans to increase unit sales to 80,000 by reducing the product’s unit price to US $320. If Fulford desires a unit target operating income of 12CYo, by what amount must it reduce the full cost per unit?
A. US $32.00 B. US $38.40 C. US $70.40 D. US $80.00