Martin Manufacturers Produces 3 Models of Industrial Hammers

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: 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.