How many units must we sell to recover increased design cost

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Reference no: EM13229511

1. a cost to produce, P, of $4.00. If we were able to reduce this to $3.55 through greater attention in the design, and if the cost to improve the design (in NRE) is $35,000, how many units must we sell to recover the increased design cost? Calculate for both the = 50% and = 75% cases. What conclusions can you draw from this?

2. In the electronics business, mark-up is in the order of 100% to 130% at each level of middleman. Let's say that it is 100%. Let's further say that your product passes through three levels of middleman, that your product is produced in accordance with the example (all the same numbers), and that = 50%. What are your retained earnings as a percentage of the final retail price?

Reference no: EM13229511

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