Question
Samsung has decided to manufacture a special edition cell phone called HiRide for the teen market next year that will be sold only with T-Mobile's
Samsung has decided to manufacture a special edition cell phone called HiRide for the teen market next year that will be sold only with T-Mobile's wireless service.Let's assume that for this design Samsung's manufacturing costs are $31 per phone, their fixed manufacturing costs are about $2,000,000, and their advertising and promotional costs are expected to be about $1,000,000.Samsung will make this phone exclusive to T-Mobile, who will feature it in their retail stores for sale to their customers. T-Mobile plans to charge $110 for this model, and Samsung will sell it to them for $90.Samsung salespeople earn a 10% commission on every unit they sell to a retailer.
[Be sure to show all work!Partial credit may be given.]
a)What is Samsung's unit contribution on the HiRide?
b)What are Samsung's total fixed costs?
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