Outrigger Leisure Products Sells 2200 Kayaks Per Year at a Price

Multiple Choice

Outrigger Leisure Products sells 2200 kayaks per year at a price of $450 per unit.Outrigger sells in a highly competitive market and uses target pricing.The company has $1,000,000 of assets and the shareholders wish to make a profit of 17% on assets.Fixed costs are $450,000 per year and cannot be reduced.Assume all products produced are sold.What are the target variable costs?

A) $139,401
B) $1,000,000
C) $820,000
D) $370,000