Haskins products sells 2,000 kayaks per year at a sales price of $470 per unit. haskins sells in a highly competitive market and uses target pricing. the company has calculated its target full product cost at $720,000 per year. total variable costs are $300,000 per year and cannot be reduced. assume all products produced are sold. what are the target fixed costs?

target fixed costs is $ 420000

Explanation:

Given data

sells 2,000

sales price of $470 per unit.

product cost at $720,000

variable costs are $300,000

to find out

target fixed costs

solution

we know here product cost and variable cost

so target fixed costs is product cost - variable costs

so we put all these value to find out target fixed cost

target fixed costs = product cost - variable costs

target fixed costs = 720000 - 300000

target fixed costs is $ 420000

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