How much extra profit per year can be generated

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Reference no: EM133412109

Question: How much extra profit per year can be generated by deciding to centralize the purchasing of the bar stool inputs?

The current discount structure for bar stool from Savage Industries is as follows:

*Material cost of input at a quantity of 350,000 or below are $8.00 per unit.

*Material costs of inputs at a quantity between 350,001 and 700,000 are 5% less per unit.

*Material costs of inputs at a quantity greater than 700,000 are 10% less per unit.

Production Labor costs pe bar stool is $4.00.
Machinery costs for each bar stool are $4.00.
Corporate overhead per bar stool is $2.00.
The selling price per bar stool is $20.00.

Reference no: EM133412109

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