A firm sets up a factory to manufacture TV sets, and this model is expected to be in the market for 10 years and its machinery will be used for this period. Every year it manufactures 12000 TV sets, the component costs are $60 per set; hourly labor costs are $10 a set; CEO salary and other overheads are $200000 a year. The firm also buys manufacturing machinery for $400000. Considering its production of 12000 TV sets every year, what should the price of the TV set be, if the firm makes no profit or loss every year.

$90

Explanation:

No of TV set in 10 years = 12000*10 years = 120,000 TV sets

Total component cost = 120,000*$60 = $7,200,000

Total labor cost = 120,000 * $10 = $1,200,000

Total cost of CEO Salary & Overheads = $200,000 * 10 = $2,000,000

Cost of machinery = $400,000

Total cost = $7,200,000 + $1,200,000 + $2,000,000 + $400,000

Total cost = $108,000,000

Cost per unit = $108,000,000/120,000

Cost per unit = $90

So, for a no profit-no loss scenario, the selling price should be $90

watch how they communicate and watch how they handle their free time

hope it !