The product development cost of Canon CI-700 is as follows. Suppose production volume is 5,000 per...
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The product development cost of Canon CI-700 is as follows. Suppose production volume is 5,000 per year, what is annual profit? How many years does it take to break-even? (10pt)
|
Setup cost |
$3 million |
|
Ramp-up cost |
$2 million |
|
Marketing and support cost |
$1 million/year |
|
Unit production cost |
$400/unit |
|
Unit price |
$800/unit |
Homework Answers
Fixed costs here are setup costs, Ramp up costs, marketing costs which all add upto 6 million dollar per year.
Variable costs here are unit production cost =400×5000=2 million dollar per year
Now selling price for all units= 800×5000= 4 million dollar
Thus,
Now since selling price is 4milliin dollars and total costs are 8 million dollars, it will take 2 years forno profit no loss situation that is in other words called breakeven.
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The product development cost of Canon CI-700 is as follows.
Suppose production volume is 5,000 per...
Development cost $ 1,300,000 Estimated development time 9 months Pilot testing $ 200,000 Ramp-up cost $...
Development cost
$
1,300,000
Estimated development time
9
months
Pilot testing
$
200,000
Ramp-up cost
$
400,000
Marketing and support cost
$
150,000
per year
Sales and production volume
60,000
per year
Unit production cost
$
100
Unit price
$
210
Interest rate
8
%
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project for a new product to be added to their small motorized
vehicle line for children. The new product is called the Kiddy
Dozer. It will look like a miniature bulldozer, complete with
caterpillar tracks and a blade. Tuff Wheels has forecasted the
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Estimated...
Development cost
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400,000
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150,000
per year
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$
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$
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Interest rate
8
%
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8%) of this project? Consider all costs and expected revenues.
(Enter your answer in thousands...
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vehicle line for children. The new product is called the Kiddy
Dozer. It will look like a miniature bulldozer, complete with
caterpillar tracks and a blade. Tuff Wheels has forecasted the
demand and the cost to develop and produce the new Kiddy Dozer. The
table below contains the relevant information for this project.
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