Kindly answer required questions number 1-4.
7-23 Target prices, target costs, value engineering, cost incurrence, locked-in costs, activity-based costing. Bell Electronics makes an MP3player, CE=100, are $45 per unit, or $315,000 per month. Monthly manufacturing costs are: c. Bell places two orders with each component suppliler each month. Aditerent supplier supolies each component. d. It currently takes 1 hour to manufacture each unit of CE100. in response to competitive pressures, Bell must reduce its price to $62 per unit and its costs by $8 per unit. No efficiency are expected to yield a net savings of $1.50 per MP3 player, but that is not enough. The chice engineer the newly designed MP3 player, colled that reduces the number of components to 50 and also simplifies testing. The expected effects of the new design are:" will replace CE100. 2. Oirect material cost for the New CE100 is expected to be lower by $2.20 per unit. b. Direct manufacturing labor cost for the New CE100 is expected to be lower by $0.50 per unit. c. Machining time required to manufacture the New CE100 is expected to be 20% less, but machine-hour capacity will not be reduced. 4. Time required for testing the New CE100 is expected to be lower by 20%. e. Aework is expected to decline to 4% of New CE100s manufactured. t. Engineering-hours capacity will remain the same. Assume that the cost per unit of each cost driver for CE100 continues to apply to New CE100. 1. Calculate Bell's manufacturing cost per unit of New CE100. 2. Will the new design achieve the per-unit cost-reduction targets that have been set for the manufacturing costs of New CE100? Show your calculations. 3. The problem describes two strategies to reduce costs: (a) improving manufacturing efficiency and (b) modifying product design. Which strategy has more impact on Bell's costs? Why? Explailh briefly. 4. What challenges might managers at Bell Electronics encounter in achieving the target cost and how might they overcome these challenges? 7-23 Target prices, target costs, value engineering, cost incurrence, locked-in costs, activity-based costing. Bell Electronics makes an MP3player, CE=100, are $45 per unit, or $315,000 per month. Monthly manufacturing costs are: c. Bell places two orders with each component suppliler each month. Aditerent supplier supolies each component. d. It currently takes 1 hour to manufacture each unit of CE100. in response to competitive pressures, Bell must reduce its price to $62 per unit and its costs by $8 per unit. No efficiency are expected to yield a net savings of $1.50 per MP3 player, but that is not enough. The chice engineer the newly designed MP3 player, colled that reduces the number of components to 50 and also simplifies testing. The expected effects of the new design are:" will replace CE100. 2. Oirect material cost for the New CE100 is expected to be lower by $2.20 per unit. b. Direct manufacturing labor cost for the New CE100 is expected to be lower by $0.50 per unit. c. Machining time required to manufacture the New CE100 is expected to be 20% less, but machine-hour capacity will not be reduced. 4. Time required for testing the New CE100 is expected to be lower by 20%. e. Aework is expected to decline to 4% of New CE100s manufactured. t. Engineering-hours capacity will remain the same. Assume that the cost per unit of each cost driver for CE100 continues to apply to New CE100. 1. Calculate Bell's manufacturing cost per unit of New CE100. 2. Will the new design achieve the per-unit cost-reduction targets that have been set for the manufacturing costs of New CE100? Show your calculations. 3. The problem describes two strategies to reduce costs: (a) improving manufacturing efficiency and (b) modifying product design. Which strategy has more impact on Bell's costs? Why? Explailh briefly. 4. What challenges might managers at Bell Electronics encounter in achieving the target cost and how might they overcome these challenges
