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Marketing predicts that using seat (B) will result in 5 lost customers per year from repeat busmess and referrals. Average gross profit per motorcycle is
Marketing predicts that using seat (B) will result in 5 lost customers per year from repeat busmess and referrals. Average gross profit per motorcycle is $3,000. Required Estimate the costs (including opportunity costs) of buying motorcycle seats from supplier (B). This problem requires that you think creatively and make reasonable estimates; thus there could be more than one correct answer. (Hint: Reread the answer to Decision Maker and compare the cost savings for buying from supplier IB) to the sum of lost customer revenue from repeat business and referrals and the cost of lost production tune.) Listed here are the total costs associated with the 2013 production of 1,000 drum sets manufactured by DrumBeat. The drum sets sell for $500 each. Required Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example.) Compute the manufacturing cost per drum set. Analysis Component Assume that 1 200 drum sets are produced in the next year. What do you predict will be the total cost of plastic for the casings and the per unit cost of the plastic for the casings? Explain Assume that 1,200 drum sets are produced in the next year. What do you predict will be the total cost of property taxes and the per unit cost of the property taxes? Explain
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