A manufacturer of mlcrowaves has dlscovered that female shoppers have Ilittle value for microwaves and attribute almost no extra value to an auto- defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to Incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer Is considering Introdudng two different models. The manufacturer has determined that men value a simple microwave at $76 and one with auto-defrost at $133, while women value a simple mkrowave at $57 and one wth auto-defrost at $76. Suppose the manufacturer is considering three pricing strategles: 1. Market a single mlarowave, with auto-defrost, at $76, to both men and women. 2. Market a single mlcrowave, with auto-defrost, at $133, to only men. 3. Market a simple microwave to women, at $57. Market a microwave, with auto-defrost, to men at $113. For simplicity, assume there Is only 1 man and 1 woman and that if the price of a microwave Is equal to an Individual's willingness to pay, the

A manufacturer of mlcrowaves has dlscovered that female shoppers have Ilittle value for microwaves and attribute almost no extra value to an auto- defrost feature. Male shoppers generally value microwaves more than women do and attribute greater value to the auto-defrost feature. There is little additional cost to Incorporating an auto-defrost feature. Since men and women cannot be charged different prices for the same product, the manufacturer Is considering Introdudng two different models. The manufacturer has determined that men value a simple microwave at $76 and one with auto-defrost at $133, while women value a simple mkrowave at $57 and one wth auto-defrost at $76. Suppose the manufacturer is considering three pricing strategles: 1. Market a single mlarowave, with auto-defrost, at $76, to both men and women. 2. Market a single mlcrowave, with auto-defrost, at $133, to only men. 3. Market a simple microwave to women, at $57. Market a microwave, with auto-defrost, to men at $113. For simplicity, assume there Is only 1 man and 1 woman and that if the price of a microwave Is equal to an Individual's willingness to pay, the

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 41P: Salem Electronics currently produces two products: a programmable calculator and a tape recorder. A...

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Isaac Nuamah is the financial manager for Asonoma Micro Dryer Company, a company that manufactures microwaves dryers. Using microwaves eliminates shrinkage of cotton and wool because clothing can be dried at a much lower surface temperature. The company currently offers a full size microwave dryer that is extremely energy efficient and dries clothes much faster than conventional dryer. However, it appears though the Ghanaian consumer is either uninterested in energy efficiency or unwilling to spend the initial cost to purchase the rather high end full size microwave dryer. Thus, Asonoma Micro Dryer Company is considering expanding into a new product – a countertop microwave that could be used in dorm rooms, apartments and hotels. Isaac is particular excited with this proposal because the product will be manufactured in a building being owned by the company which is located near the spintex road in Accra. This vacant building and the land can be sold for GHS5, 000 000. The…
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