Jaybird Company operates in a highly competitive market where the market price for its product is $50 per unit. Jaybird desires a 30% profit per unit. Jaybird expects to sell 5,000 units. Additional information is as follows:
Variable Costs per Unit Fixed Costs (total)
Direct materials $ 5 Overhead $ 45,000
Direct labor 6 General and administrative 18,000
Overhead 4
General and administrative 10
To achieve the target cost per unit, Jaybird must reduce total expenses by how much?
Multiple Choice
$14,500
$3,500
$23,000
$20,000
$13,000