WDY Corporation Currently Sells Its Primary Product for $85 Per

Multiple Choice

WDY Corporation currently sells its primary product for $85 per unit, with a profit margin of 30%. Cost of goods sold totals 40% of the product's total cost. WDY's managers are considering implementing a Kaizen costing system.
As part of its Kaizen costing project, WDY's accountants estimate the price of the product will decline by 20% next year. If WDY is successful in achieving its Kaizen goal, the reduced nonmanufacturing cost (i.e., the cost excluding the product cost) per unit will be:

A) $47.60
B) $28.56
C) $19.04
D) $20.40