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I need both the parts properly done please, so I can get ready for my test. Need both parts done please, thanks alot in advance!
I need both the parts properly done please, so I can get ready for my test. Need both parts done please, thanks alot in advance!
Henderson Inc. plans to introduce a new product next year. This product has a two-year life and an estimated demand of 20,000 units annually. The product will be produced 50 weeks each year. Henderson, Inc. estimates the following costs: Direct materials will be $25 per unit. Setup costs will be $300 per set up, five setups will be required per week. Specialized equipment must be rented for $7,000 per week. Design costs are estimated to be $50,000 Research and development costs are estimated at $350,000 Labor will be paid at $15 per hour. . . Five employees will be assigned to this product and each employee will work 35 hours per week on the product. They will work at this rate during the entire two year production life of the product. Disregard the taxes that are due. Instead use the gross payroll for this line. Henderson Inc. uses cost-plus pricing whereby the selling price of each of its products is 140 percent of the life-cycle costs (that is, an additional 40% is added to the total cost to make the product to determine the final price) Determine the selling price of the product. Henderson, Inc still has the same costs outlined in 1- Life Cycle Pricing but now wants to the determine the selling price using Target pricing. They have set the price at $100 per unit and require a 60% return. 1. Will the product meet their expectations for a 60% return? 2. What if they required a 25% return? Note that "Return refers to the percentage a company wants left over from the selling price after the company has factored in what it costs to make it in other words Return = Selling price minus costsStep by Step Solution
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