Idea: Smart Home Energy Monitoring System - Allows homeowners to track and manage energy usage.

Cost estimates: Taking into account manufacturing, software development, and marketing costs, the estimated cost per device is $50.

Pricing Approach: Target costing, which establishes the selling price according with the planned profit margin.

Rationale: By maintaining features and quality in line with consumer demands, target costing ensures profitability.

Growth and Profit Expectations: Assuming 10,000 units sold in the first year with $1 million in profits, estimate 15% yearly growth. Cost per unit will decrease by 10% annually.

Real-World Example: In the electric vehicle market, businesses like Tesla are taking on environmental accounting and sustainability. They give attention to eco-friendly products and provide clear data on consumption of energy and emissions.

After reading a summary on this product, research and answer each statement below:

What about special pricing for some markets or customers?

Determination of customer profitability.

Show effect on revenues and profitability based on stated assumptions.

Potential advantages and disadvantages, both financial and non-financial.