Ganges Company Makes Bulk Burlap by the Tonne

Multiple Choice

Ganges Company makes bulk burlap by the tonne. Currently, their manufacturing cost is $215 per unit, and their non- manufacturing cost is $40 per unit. The going market price of the product is $300. Ganges uses the target price and target cost methodology. If they desire to make a profit of 20% on the price, what must they do?

A) Reduce the full- product cost by $15 per unit.
B) Increase the advertising costs by $15 per unit.
C) Reduce the full- product cost by $60 per unit.
D) Reduce the price they charge by $15 per unit.