Metal Inc. has developed a new product that, in field tests, delivers significant customer value. I am learning about pricing strategies and how to calculate them.

$1.$ Prepare a specific monetary estimate of customer value: what should a customer be willing to pay for one of Metal$$s new cushion pads?

$2.$ What price should Metal set for one of the new cushion pads $($size $11\mathrm{.}5$ inches$)$ and why?

$3.$ How big is the potential market for this product?

Data:

Variable cost $=$ $$46\mathrm{.}92$

Labor $=$ $$86\mathrm{.}40$

Fixed factory overhead at $360\%$ labor $=$ $$311\mathrm{.}04$

Estimated volume $=250$ cushion pads$/$month

Contribution margin goal $=50\%$

Usage $=25$ weeks$/$year at $30$ hours$/$week due to seasonality