SungSam, Inc. is designing a new digital camcorder that is projected to have the following per-unit costs to manufacture:
Cost Categories Unit Costs
Material Costs $63
Labor Costs 24
Overhead Costs 110
Total Unit Cost $197
SungSam adds 30% to its manufacturing cost for corporate profit.
a. What unit profit would SungSam realize on each camcorder?
b. What is the overall cost to produce a batch of 10,000 camcorders?
c. What would SungSam's profit be on the batch of 10,000 of historical data show that 1% of product will be scrapped in manufacturing, 3% of finished product will go unsold, and 2% of sold product will be returned for refund?
d. How much can SungSam afford to pay for a contract that would lock in a 50% reduction in unit material cost previously given? If SungSam does sign the contract, the sales price will not change.
Answers: 3
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SungSam, Inc. is designing a new digital camcorder that is projected to have the following per-unit...
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