KO Toys has recently performed an analysis on a new toy product that they are planning to develop and sell. Marketing has informed them that they will sell 100,000 units per year. The selling price per unit will be $50. They estimate the variable cost per unit to be $30, and total fixed costs to be $1,000,000. Their required return is 20% of the selling price. What is their target cost reduction?
A). $100,000
B). $200,000
C). $250,000
D). $0 - the company has already achieved its required return of 20%