1. Imagine you are buying gaskets. Your supplier calls you up with bad news: The workforce voted to unionize. Labor costs are now going up by 25%! He asks you for a25% increase in pricing. He tells you that because you are a "customer of choice," he doesn't want to pass along all of the costs to you. You look at your most recent cost breakdown for gaskets (shown below). What are you going to tell the supplier? What is the highest percentage price increase you are willing to accept?

Supplier Cost Breakdown for Gaskets
Labor	$4.00
Material	$4.00
Overhead	$6.00
Tooling	$1.00
Total Factory Cost	$15.00
SG&A	$1.50
Total Cost	$16.50
Profit (Industry Standard 10%)	$1.65
Price Paid	$18.15

2. You are purchasing televisions from an overseas supplier in Japan. The supplier ships 500 televisions in each container. Based on the data provided, what is the total unit cost for each television?

Cost Category	Cost
Purchase price per television	$98
Ocean Freight costs per container	$5,000
Customs fees based on unit price	10%
Port handling costs per container	$2,750
Insurance costs per container	$500
Warehouse charges per television	$2.00
Quality control fees per television	$1.50