Manufacturer is designing new product

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Reference no: EM131324147

A manufacturer is designing a new product, and would like to estimate the cost for this product. The production capacity is 500 units per day. The operating cost is $1000 per day. A worker can product 40 units of product per day, and the unit cost of direct labor is $160 per worker per day. Indirect labor cost is 30% of direct labor cost. One unit of product needs 0.5 pounds of raw material, and the material price is $15 per pound. (1) Please write down all the cost components to be considered in estimating the manufacturing cost of this new product. (2) Please calculate the manufacturing cost per unit of product. (note: the number of workers needed for each day does not have to be an integer in your calculation.) (3) What is the target cost if the manufacturer’s expected profit margin is 10% and its competitor’s price is $15.5.

Reference no: EM131324147

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