afford to pay for the preparation of the new design and making changes in equipment

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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A company manufactures 1,500,000 units of a product yearly. A new design of the product
will reduce materials cost by 20% but will increase processing cost by 8%. If materials cost is
₱10.00 per unit and processing will cost ₱0.50 per unit, how much can the company afford to
pay for the preparation of the new design and making changes in equipment?

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