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The salespeople at Shamrock, a notebook manufacturer, commonly pressured operations managers to keep costs down so the company could give bigger discounts to large customers.
The salespeople at Shamrock, a notebook manufacturer, commonly pressured operations managers to keep costs down so the company could give bigger discounts to large customers. Michael, the operations supervisor, leaked the $ total unit cost to salespeople, who were thrilled, since that was slightly lower than the previous year's unit cost. Budgets were not yet finalized for the upcoming year, so it was unclear what the target unit cost would be Michael knew the current year's operating capacity was two million notebooks, and Shamrock produced and sold just that many. The detailed breakdown of the $ total unit cost is as follows.Direct material$Direct laborVariable overheadFixed overheadTotal cost per unit$ Shamrock reworks its equipment layout and processes to increase the top end of its relevant range of activity to notebooks without incurring more fixed costs, what happens to the fixed cost per unit if it is able to make and sell that larger quantity of units? Round per unit answers to decimal places, eg Fixed costs Decreased by per unit Total cost per unit $ $ Gross margin per unit How deep a discount could salespeople give customers under scenario above and still generate the same total gross margin as last year? Round answer to decimal place, eg Discount....
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