Martin Manufacturers Produces 3 Models of Industrial Hammers What Must the Company Do to Achieve Their Profit Goal

Multiple Choice

Martin Manufacturers produces 3 models of industrial hammers. Martin uses the target pricing approach. The company's objective is to achieve gross profit equal to 40% of selling price. Other data are shown below:
$$\begin{array} { l l } \text { Current production cost } & \$ 42.50 \text { per unit } \\\text { Current market price } & \$ 60.00 \text { per unit }\end{array}$$
What must the company do to achieve their profit goal? (Please round all amounts to the nearest cent.)

A) Reduce production cost by $6.50 per unit.
B) Increase price by $0.50 per unit.
C) Reduce production cost by $4.20 per unit.
D) Increase price by $6.50.