Bakersfield Manufacturing Produces Agricultural Tools Including a Hand Tiller

Multiple Choice

Bakersfield Manufacturing produces agricultural tools including a hand tiller. Their current full-product cost for a hand tiller is $20. Bakersfield wishes to make a 15% profit on the selling price. Bakersfield uses a target pricing strategy. The current competitive market price for this product is $22. What does Bakersfield have to do to achieve their profit objective?

A) Reduce full-product cost by $1.30.
B) Reduce full-product cost by $3.00.
C) Reduce full-product cost by $2.70.
D) Reduce full-product cost by $11.25.