Question
Consider the following. a. What is the purchasing price? (Calculate Factory Cost and Total cost that lead to Purchasing price) b. If the supplier indicates
Consider the following. a. What is the purchasing price? (Calculate Factory Cost and Total cost that lead to Purchasing price)
b. If the supplier indicates a 20% increase in labor costs and demands a 20% increase in purchasing price. How much supplier is asking? What should be the new purchasing price? How much increase is this compared to what supplier is asking?
| Recent Cost Breakdown and Price |
| With 20% Increased Labor |
| Material | 0.7 |
|
| Labor | 1.30 |
|
| Overhead (120% of labor) |
|
|
| Tooling | 0.5 |
|
| Factory Cost |
|
|
| SGA Expense (10% of Factory cost) |
|
|
| Total Cost |
|
|
| Markup (12% of total cost) |
|
|
| Purchasing price |
|
|
| Requested price |
|
|
Price differential:
Response?
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