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Procter & Gamble (P&G) is analyzing the costs of producing a new line of skincare products. The fixed costs for production are $8,000,000, and the
Procter & Gamble (P&G) is analyzing the costs of producing a new line of skincare products. The fixed costs for production are $8,000,000, and the variable costs are $1.50 per unit. P&G plans to produce 5,000,000 units in the first year. Additionally, marketing and distribution costs are expected to be $0.50 per unit.
Requirements:
- Calculate the total production costs for the first year.
- Determine the cost per unit.
- Analyze the impact of increasing production to 6,000,000 units on total and per-unit costs.
- Discuss the importance of managing marketing and distribution costs.
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