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Huang Automotive is presently operating component for $199 per unit. Peter Wu, vice president of sales, note that although there will be an additional $3.00

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Huang Automotive is presently operating component for $199 per unit. Peter Wu, vice president of sales, note that although there will be an additional $3.00 shipping cost for each component, he thinks that accepting the order will get the company's foot in the door of an expanding international market To determine variable and fixed costs, Huang's accountant used the high-low method with the following production and cost information for the last two years 199,000 units $54,628,500 Total costs 222,000 units $58,773,000 $264.74 Total costs per unit $275.52 TJ. Chan, vice-president of engineering, feels that any new market should first show its profitability and that the $199 per unit offer is not only below the regular $260 selling price, but it's below the unit cost of the component. She also points out that there will be additional setup costs of $270,000 and that Huang will have to lease some special equipment for $290,000 Huang Automotive is presently operating component for $199 per unit. Peter Wu, vice president of sales, note that although there will be an additional $3.00 shipping cost for each component, he thinks that accepting the order will get the company's foot in the door of an expanding international market To determine variable and fixed costs, Huang's accountant used the high-low method with the following production and cost information for the last two years 199,000 units $54,628,500 Total costs 222,000 units $58,773,000 $264.74 Total costs per unit $275.52 TJ. Chan, vice-president of engineering, feels that any new market should first show its profitability and that the $199 per unit offer is not only below the regular $260 selling price, but it's below the unit cost of the component. She also points out that there will be additional setup costs of $270,000 and that Huang will have to lease some special equipment for $290,000

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