Break-even with Opportunity Costs				25%
Cost Behavior				25%
Multiple Product Break-even				25%
NPV (extra credit)				15%
Sunk Costs				25%
				115%

	Competitor 100 Plastic Rings	Industrial Grinders 100 Steel Rings (Finished)		Industrial Grinders 100 Steel Rings (Unfinished or Specialized Steel)
Selling Price	$ 320.40	$ 320.40
Costs
Direct Material	$ 4.20	$ 76.65
Direct Labor	15.60	46.80
Overhead
Departmental	31.20	93.60
Administrative	15.60	46.80
Total Manufacturing Costs	$ 66.60	$ 263.85
Regarding the Overhead costs, these are allocated based on Direct Labor;
The Variable Overhead costs are 80% of the Direct Labor amount, and relate to the benefits for the labor force.
As you recall from the case, Industrial Grinders has the opportunity to hire the German Labor Force
at a rate of 70% of the normal rate. What would be the RELEVANT costs for Decision-Making
to produce the UNFINISHED (or Specialized Steel) to FINISHED steel? Please indicate your answers in the YELLOW boxes above.
Also, what PRICE POINT would the customer expect to see for the Steel Rings given that the Competitors Plastic Rings
last FOUR times as long? Please indicate in the YELLOW BOX in Cell E9.
Lastly, briefly comment on whether it would be cheaper to produce the Plastic Rings or to hire the German Labor from a
RELEVANT COST perspective. No more than two sentences are required.