Miami Industries currently sells an industrial mixer for $900 that market leaders sell for $820. The current costs to manufacture and distribute the mixer total $645, and the company has a profit goal of 30% of sales. Miami uses target costing in its efforts to be a leader in the marketplace. On the basis of this information, (1) what should Miami consider to be the initial driver of the target-costing process and (2) what amount of cost reduction is needed for the company to achieve its goals? Initial DriverCost ReductionA.Current price of $900$15B.Current price of $900$71C.Market leaders' price of $820$15D.Market leaders' price of $820$71E.Market leaders' price of $820Some other amount
A. Choice A
B. Choice B
C. Choice C
D. Choice D
E. Choice E
Answer: D
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