The following information applies to the questions displayed below. EagleEye Com
ID: 2529910 • Letter: T
Question
The following information applies to the questions displayed below. EagleEye Company, a manufacturer of digital cameras, is considering entry into the digital binocular market. EagleEye Company currently does not produce binoculars of any style, so this venture would require a careful analysis of relevant manufacturing costs to correctly assess its ability to compete. The market price for this binocular style is well established at $145 per unit. EagleEye has enough square footage in its plant to accommodate the new production line, although several peces of new equipment would be required; their estimated cost is $4.8 0,000. EagleEye requires a minimum Rol o 13% on any product line investment and estimates that irit enters this market with its digital binocular product at the prevailing market price, it is confident of its ability to sell 22,000 units cach year Required Information 10.00 points a identify the costs that EagleEye Company would consider for decision of entering the digital binocular market(Select all that apply Raw materials and direct labor. Branch manager's salary Design and engineering costs Variable overhead and new fixed overhead costs Facilty costs Hints References eBook & Resources Hint # Required information 1000 points b. Calculate the target cost per unit for entry into the digital binocular market. (Round your answer to 2 decimal places.)Explanation / Answer
A Costs to be considered: Raw Material and Direct Labor All Costs to be incurred are relevant Design And Engineering Cost Variable Oerhead and new Fixed OH Costs **Assumed: Branch Manager Salary is a Unavoidable Fixed Cost B Estimated Sale Price(Market Price) 145.00 Less: Desired Investment Return** 28.66 Target Cost 116.34 Desired Investment Return** A Investment to be made 4850000 B Minimum ROI 13% Total Minimum Return(A*B) 630500 Estimated Units to be Sold 22000 Desired Investment Return PU 28.66 (630500/22000)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.