Vanguard Corp

Multiple Choice

Vanguard Corp. uses target return pricing and is hoping to earn a 20 percent return on its investment of $1 million during the coming year. Vanguard sold 30,000 units last year and hopes the same quantity will be sold this year. If Vanguard has fixed costs of $250,000 and variable costs of $10 per unit, what price should the firm set to achieve its target return?

A) $58.30
B) $60.00
C) $20.00
D) $30.00
E) $25.00