Question

A sunglasses manufacturer wishes to determine the minimum price it should charge a customer for a special order of sunglasses. The customer has requested a quotation for 100 sunglasses (10 batches) but might subsequently place an order for an additional 100. Material costs are €25 per pair of sunglasses. It is estimated that the first batch of sunglasses will take 80 hours to be completed and a 70% learning curve would apply. Labour and variable overhead costs amount to €2. Setup costs are €800 regardless of the units produced

1. What is the minimum price the company should charge for the initial order if there is no guarantee of further orders
2. If the company was to receive a follow up order, what would the minimum price of this order be
3. What would be the minimum price if both orders were placed together

Answer 1

Answer to (i):			Amount in GBP
Calculation of Minimum Price for Initial order if no guarantee of further order
No of Sunglasses to be Made	100
Batches	10
First Batch No of Hours	80 Hours
Learning Curve	70%
Total No of Hours:
Batch	No of Hours
1	80
2	56
3	39
4	27
5	19
6	13
7	9
8	7
9	5
10	3
Total	259
Material Costs	2,500
	(25*100)
Labour & Var OH	518
	(2*259)
Set up Costs	800
Total Costs	3,818
Minimum Price	38.18
(3818/100)
Answer to (ii):			Amount in GBP
Calculation of Minimum Price for Follow up order
Material Costs	2,500
	(25*100)
Labour & Var OH	518
	(2*259)
Set up Costs	-
(already incurred in First Order)
Total Costs	3,018
Minimum Price	30.18
(3818/100)
Answer to (iii):			Amount in GBP
Calculation of Minimum Price for Both orders
No of Sunglasses to be Made	200
Batches	20
First Batch No of Hours	80 Hours
Learning Curve	70%
Total No of Hours:
Batch	No of Hours
1	80.00
2	56.00
3	39.20
4	27.44
5	19.21
6	13.45
7	9.41
8	6.59
9	4.61
10	3.23
11	2.26
12	1.58
13	1.11
14	0.78
15	0.54
16	0.38
17	ekkarill92 Next > < Previous Related Solutions A manufacturer wishes to determine the cose of producing open-top cylindrical containers. C languageA manufacturer wishes to determine the cose of producing open-top cylindrical containers. The surface area of the container is the sum of the area of the circular base plus the are of the outside the circumference of the base times the height of the container). Write a program to take the radius of the base, the height of the container, the cost per square centimeter of the material (cost), and the number of containers to be produced (quantity). Calculate... A university is trying to determine what PRICE to charge for football tickets. At a price... A university is trying to determine what PRICE to charge for football tickets. At a price of $6 per ticket, it averages 70,000 people per game. For every increase of $1, it loses 10,000 people from the average number . Every person at the game spends an average of$1.50 on concessions. a) What price per ticket should be charged to MAXIMIZE REVENUE? ( Please explain the steps ) b) How many people will attend at that price? Please show your...    1. Why can't a monopolist charge any price he wishes for his product?      ...    1. Why can't a monopolist charge any price he wishes for his product?       2. The Government grants a single firm the right to sell food and drink in Yosemite National Park. What are thge tradeoffs associated with such a poicy?       3. Give two examples of natural monopolies. Should the government set price ceilings in natural monopoly markets? Why?       4. Monopolistic competition has some of the same characteristics as monopoly and some of the... To price-discriminate, a firm should charge a higher price to customers with _______ demand as compared... To price-discriminate, a firm should charge a higher price to customers with _______ demand as compared to other consumers of this good. the same elasticity of more elastic For a fir more inelastic din charging different prices to different types of consumers, it needs to also _______ as a failure to do so would result in a loss of profits. Use Mortality Table to calculate the minimum premium an insurance company should charge for a $1... Use Mortality Table to calculate the minimum premium an insurance company should charge for a $1 million two-year term life insurance policy issued to a woman aged 50. Assume that the premium is paid at the beginning of each year and that the interest rate is zero. What is the minimum transfer price that the Engine Division should accept? Swifty Corporation manufactures and sells high-priced motorcycles. The Engine Division produces and sells engines to other motorcycle companies and internally to the Production Division. It has been decided that the Engine Division will sell 23000 units to the Production Division at 1050 a unit. The Engine Division, currently operating at capacity, has a unit sales price of $2650 and unit variable costs and fixed costs of $1050 and $1600, respectively. The Production Division is currently paying $2500 per unit to... 72. The purposes of a(n) ______ should be to determine whether the project provided the customer... 72. The purposes of a(n) ______ should be to determine whether the project provided the customer with the expected benefits, assess the level of customer satisfaction, and obtain any feedback that would be helpful in future business relationships with this customer or with other customers. a. post-project evaluation meeting with the customer or sponsor b. project progress meeting with project stakeholders c. analysis session with the project team d. pre-RFP meeting with the customer A university is trying to determine what price to charge for tickets to football games. At... A university is trying to determine what price to charge for tickets to football games. At a price of ​$21 per​ ticket, attendance averages 40,000 people per game. Every decrease of $3 adds 10,000 people to the average number. Every person at the game spends an average of $4.50 on concessions. What price per ticket should be charged in order to maximize​ revenue? How many people will attend at that​ price? What is the price per​ ticket? What is the... A university is trying to determine what price to charge for tickets to football games. At... A university is trying to determine what price to charge for tickets to football games. At a price of ​$27 per​ ticket, attendance averages 40,000 people per game. Every decrease of ​$33 adds 10,000 people to the average number. Every person at the game spends an average of ​$4.50 on concessions. What price per ticket should be charged in order to maximize​ revenue? How many people will attend at that​ price? A university is trying to determine what price to charge for tickets to football games. At... A university is trying to determine what price to charge for tickets to football games. At a price of ​$22 per​ ticket, attendance averages 40,000 people per game. Every decrease of ​$22 adds 10,000 people to the average number. Every person at the game spends an average of ​$3.00 on concessions. What price per ticket should be charged in order to maximize​ revenue? How many people will attend at that​ price? ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions Parallel Arrays This question is in MindTap Cengage Summary In this lab, you use what you... 5. You have invested 30 percent of your portfolio in Jacob, Inc., 40 percent is Bella... JAVA Write a test program that prompts the user to enter a series of integers and... (2) Cite an example on how organizations like Google, Facebook, Youtube etc collect data for image... The legal landscape is perpetually changing. Psychologists must remain abreast of these changes to avoid potentially... We are evaluating a project that costs $1.68 million, has a six-year life, and has no... In C++ Having call-by-reference allows one to use storeback parameters, i.e., parameters whose values are transmitted... ADVERTISEMENT About @ 2020 WizEdu