Success Electronics LLC is planning to introduce a low cost smart phone with attractive features. The market research information suggests that the product should sell 2000 units at RO 30 per unit. The company seeks to make a mark-up of 20% product cost. It is estimated that the lifetime costs of the product will be as follows: Design and development costs RO 5000 Manufacturing costs RO 22 per unit End of life costs RO 7000 What is target cost per unit to achieve the desired profit? a. RO 24 per unit b. RO 25 per unit c. RO 22 per unit d. RO 20 per unit
Success Electronics LLC is planning to introduce a low cost smart phone with attractive features. The market research information suggests that the product should sell 2000 units at RO 30 per unit. The company seeks to make a mark-up of 20% product cost. It is estimated that the lifetime costs of the product will be as follows: Design and development costs RO 5000 Manufacturing costs RO 22 per unit End of life costs RO 7000 What is target cost per unit to achieve the desired profit? a. RO 24 per unit b. RO 25 per unit c. RO 22 per unit d. RO 20 per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Success Electronics LLC is planning to introduce a low cost smart phone with attractive features. The market research information suggests that the product should sell 2000 units at RO 30 per unit. The company seeks to make a mark-up of 20% product cost. It is estimated that the lifetime costs of the product will be as follows:
Design and development costs RO 5000
Manufacturing costs RO 22 per unit
End of life costs RO 7000
What is target cost per unit to achieve the desired profit?
a.
RO 24 per unit
b.
RO 25 per unit
c.
RO 22 per unit
d.
RO 20 per unit
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