A company is planning a new product. Market research information suggests that the product shoul sell 10,000 units at P21.00/unit. The company seeks to make a mark-up of 40% product cost. It is estimated that the lifetime costs of the product will be as follows: Design and development costs P50,000 Manufacturing costs P10/unit End of life costs P20,000 The company estimates that if it were to spend an additional P15,000 on design, manufacturing costs/unit could be reduced.

A company is planning a new product. Market research information suggests that the product shoul sell 10,000 units at P21.00/unit. The company seeks to make a mark-up of 40% product cost. It is estimated that the lifetime costs of the product will be as follows: Design and development costs P50,000 Manufacturing costs P10/unit End of life costs P20,000 The company estimates that if it were to spend an additional P15,000 on design, manufacturing costs/unit could be reduced.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000
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