Dead Sea Company is planning to introduce a new product in 2022. Market research Department in the company estimates that the product will sell 10,000 units at JOD 21 per unit. The company seeks to make a profit margin 40% of the target product cost.

Required:

1.The CEO of the company decided to follow the suggestion of the Market Research Department and asked you as a Senior Manager to determine the target cost of the product. (3 Marks)

2.After determining the target cost of the product, the Dead Sea Company has estimated that the lifecycle costs of that product are:

Product design and Market Research Costs

JOD 50,000

Operating/Manufacturing Costs

JOD 100,000

After sales Costs

JOD 20,000

Therefore, the CEO asked; would you recommend producing the new product or not and why? (3 Marks)

Question 2 Dead Sea Company is planning to introduce a new product in 2022. Market research Department in the company estimates that the product will sell 10,000 units at JOD 21 per unit. The company seeks to make a profit margin 40% of the target product cost. Required: 1. The CEO of the company decided to follow the suggestion of the Market Research Department and asked you as a Senior Manager to determine the target cost of the product. (3 Marks) 2. After determining the target cost of the product, the Dead Sea Company has estimated that the lifecycle costs of that product are: Product design and Market Research Costs Operating/Manufacturing Costs After sales Costs JOD 50,000 JOD 100,000 JOD 20,000 Therefore, the CEO asked; would you recommend producing the new product or not and why? (3 Marks)