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Question - ChemCo has developed a new product, and has consulted with its marketing department, who have determined that the market share will be 20,000 units, and have recommended that a selling price of $60.00 per unit would be appropriate. ChemCo has been able to keep the cost per unit at $50.00.
The company has spent a total of $900,000 to design and develop this product.
Required: Use the above information to compute as follows:
1. Compute the expected margin for ChemCo.
2. Compute the expected turnover.
3. Compute the ROI.
Explain why it is necessary to do the above computations, and show how management can use this information for managing operations.
Use this information to determine the total manufacturing costs incurred during the fiscal year 2018. (Round enter as whole dollars only.)
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