Cardinal Corporation has just come to you with a new wagon that you can use for your pumpkin farm. With this new wagon, customers will be able to enjoy a hayride while social distancing and be relative risk free of contracting coronavirus.

They have already built a prototype and have been transparent by explaining exactly how their costs were determined. It took 20 hours to build with an hourly rate to their employees of $20 per hour. Overhead is charged at $5 per direct labor hour. Direct materials costs $400 per wagon. They need a profit of $300 per wagon, so they have offered to sell seven of these wagons to you for $1,200 each, for a total of $8,400.

Required: Develop an analysis to determine if you would be willing to purchase these seven units if you already know that an 80% average time learning curve would be appropriate for this type of product. Included in your analysis state exactly how much you would be willing to pay to give the supplier the $300 profit per unit that they want. You will not be buying (or paying for the inefficiencies) the prototype that the company has already produced.