Cutting the current price to customers

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Reference no: EM132095194

Assume that your R&D team has a new design for their product Able next round that can reduce their material cost of producing units from $8.59 to $7.73. They pass on half of all cost savings by cutting the current price to customers. For simplicity:

Use current labor cost of $8.37

Assume all period costs as reported on Andrews Income Statement for Asia Pacific (Annual Report Page 5) will remain the same.

Current price is equivalent to $30.00

Shipping cost to Asia Pacific is $2.50 per unit

Determine how many units (000's) of product Able would need to be sold in Asia Pacific alone next round to break even on the product.

Possible answers:

357 units
297 units
302 units
371 units
386 units

Reference no: EM132095194

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