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Question
Leon Production produces steel rivets for the shipbuilding business. Leon uses the target pricing approach. The company's objective is to achieve gross profit equal to 25% of selling price. Other data are shown below:
Current production cost $112 per carton
Current market price $130 per carton
What must the company do to achieve their profit goal? (Please round all amounts to the nearest cent.)
A) Reduce production cost from $112 to $110.00.
B) Reduce production cost from $112 to $97.50.
C) Reduce production cost from $112 to $101.25.
D) Reduce production cost from $112 to $99.00.
Answer
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