PROBLEM

Infiniti is the luxury brand cars produced by the company Nissan Motor Co. Ltd. founded in 1989.

The company is in the process of introduction a new model of sport's car to the Polish market. Before the CFO makes a final decision about preparing the final report with profit forecast, he commissioned making a market research.

The management would like to find out about customers perspectives on the price of the product and their expectations regarding facilities and design. As a final result of this research and initial draft of cost calculation, a target selling price of 350 000 PLN has been established.

Cost estimates have been prepared based on the proposed product specification:

MANUFACTURING COST (per one car)	PLN
Direct material Direct labor Direct machinery Support orders Quality assurance	87 000 23 000 32 000 5 000 28 000
NON MANUFACTURING COST (per one car)	PLN
Marketing Distribution Warrants service	34 000 54 000 13 000

The management expect the target profit margin for this sports car on the level of 30% of the proposed selling price.

REQUIRED

1. Calculate the target cost of the new car and the target cost gap. (5 marks)
2. Based on your knowledge and information from market research regarding high clients expectations about the need to use high-quality materials, you have to suggest 5 possibilities how the company could close the gap. (5 marks)