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What is the target variable cost per unit

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Reference no: EM133095699

Question - Well - Bread Grain Company is a price - taker and uses target pricing. The company has just done an analysis of its revenues, costs, and desired profits and has calculated its target full product cost. Assume all products produced are sold. Refer to the following information:

Target full product cost $510,000 per year

Actual fixed cost $280,000 per year

Actual variable cost $2 per unit

Production volume 150,000 units per year

Actual costs are currently higher than target full product cost. Assuming that fixed costs cannot be reduced, what is the target variable cost per unit?

Reference no: EM133095699

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