You want to evaluate if one of JDMs Taiwanese suppliers is cost competitive. You ask Frank for a cost breakdown for JDMs mid-range coffee maker. JDMs mid-range coffee maker does not have all of the features that the Family Man offers, but it is similar in most functions. Frank does not have a full cost breakdown, but states that the direct material cost is $4, direct labor cost is $1 (15 minutes at $4 per hour), and the final price is $11.23 each.

Primo Caf now uses a Vietnamese supplier for the Family Man for $12 each. You do have a cost breakdown for the Family Man, which is provided in the excel file.

Apply the cost plus (should cost) framework presented in class in week 7 to complete the questions below. Complete all calculations in the excel file provided, that you will upload with your exam.

1. What would be the estimated price from the Vietnamese supplier for JDMs mid-range coffee maker?

Assume that the direct material cost would be the same and that the number of minutes of direct labor would be the same as Franks information from the Taiwanese supplier. Also, assume that the Vietnamese suppliers allocations for Overhead, SG&A and Profit, and Direct Labor cost/hour for Family Man will be the same if they manufactured JDMs mid-range coffee maker.

Answer this question and fill out the table for the Vietnamese supplier and the Taiwanese supplier as well!

\begin{tabular}{lrc} \multicolumn{3}{l}{ Vietnamese price } \\ \multicolumn{3}{c}{ for Family Man } \\ DM & $6.395 & \\ DL & $1.00 & (20 minutes at $3 per hour) \\ OH & $1.30 & 130% \\ \hline COGS & $8.70 & \\ SG\&A & $1.74 & 20% \\ \hline TPC & $10.43 & \\ Profit & $1.57 & 15% \\ \hline Sell Price & $12.00 & \end{tabular} visubances pilve - JDM's Mid-range product DM DL \begin{tabular}{l} OH \\ \hline COGS \\ SG\&A \\ \hline TPC \\ Profit \\ \hline Sell Price \end{tabular} Taiwanese Supplier