1. Lambda Electronics

Scenario: Cost-Plus Pricing and Profit Margin Analysis

Data: Lambda Electronics manufactures electronic components and applies a cost-plus pricing strategy to set selling prices. The company reported the following cost and pricing information for its latest product:

• Total Manufacturing Costs: $500,000
• Desired Profit Margin: 30%
• Expected Sales Volume: 10,000 units

Requirements: Calculate the selling price per unit using Lambda Electronics' cost-plus pricing formula. Analyze the profit margin achieved with the calculated selling price. Discuss the advantages and disadvantages of cost-plus pricing for Lambda Electronics. Evaluate the appropriateness of the cost-plus pricing strategy in achieving the company's profit objectives. Recommend pricing strategies for Lambda Electronics to enhance profitability and competitiveness in the market.