ACG 2071 Cassa Company is a price-taker and uses target pricing

Cassa Company is a price-taker and uses target pricing. Refer to the following information:Production volume601,000units per yearMarket price$32per unitDesired operating income16%of total assetsTotal assets$13,900,000Variable cost per unit$20per unitFixed cost per year$5,400,000per yearWith the current cost structure, Cassa 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, what are the target variable costs per year? Assume all units produced are sold.$12,020,000$11,608,000$5,400,000$17,008,000