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JK Ossein Inc. is planning the development of a new product. Market research information suggests that the product should sell 1 0 0 0 0

JK Ossein Inc. is planning the development of a new product. Market research information suggests that the
product should sell 10000 units at R420 per unit. The company seeks to make a mark-up of 40% product cost. It is
estimated that the lifetime costs of the product will be as follows:
Design and development costs R1000000
Manufacturing costs R200 per unit
End of life costs R500000
By comparing the unit target cost and unit life cycle cost of the product, state whether the product is worth
making.
A. The unit target cost and the unit lifecycle cost are R252 and R300 respectively; thus, the product is worth making.
B. The unit target cost and the unit lifecycle cost are R300 and R350 respectively; thus, the product is not worth making.
C. The unit target cost and the unit lifecycle cost are R588 and R350 respectively; thus, the product is worth making.
D. The unit target cost and the unit lifecycle cost are R168 and R300 respectively; thus, the product is not worth making.
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