Flyer Company sells a product in a competitive marketplace. Market analysis indicates that its product would probably sell at $48 per unit. Flyer management desires a 12.5% profit margin on sales. Their current full cost for the product is $44 per unit.
If the company meets the new target cost number, how much will it have to cut costs per unit, if any?
a. $2
b. $0
c. $1
d. $3