[solved] Assume that your R&D team has a new design for their product Able next round that can reduce their material cost
Assume that your R&D team has a new design for their product Able next round that can reduce their material cost of producing units from $8.59 to $7.73. They pass on half of all cost savings by cutting the current price to customers. For simplicity:
- Use current labor cost of $8.37
- Assume all period costs as reported on Andrews Income Statement for Asia Pacific (Annual Report Page 5) will remain the same.
- Current price is equivalent to $30.00
- Shipping cost to Asia Pacific is $2.50 per unit
Determine how many units (000's) of product Able would need to be sold in Asia Pacific alone next round to break even on the product.
297 units
357 units
371 units
386 units
