Assume that your RD 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….

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
  • 8578 period costs
  • 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

386 units

302 units

357 units

371 units

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