Rica Company is a price-taker and uses target pricing. Please refer to the following information: With the current cost structure, Rica cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs. Assuming that fixed costs cannot be reduced, how much will be the target variable costs per year?

Question

Rica Company is a price-taker and uses target pricing. Please refer to the following information:  With the current cost structure, Rica cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs. Assuming that fixed costs cannot be reduced, how much will be the target variable costs per year?

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The Answer of Rica Company is a price-taker and uses target pricing. Please refer to the following information:  With the current cost structure, Rica cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs. Assuming that fixed costs cannot be reduced, how much will be the target variable costs per year?

Rica Company Is a Price-Taker and Uses Target Pricing