Calculate the price that you should charge to sell one widget in Germany in US d

Question

Calculate the price that you should charge to sell one widget in Germany in US dollars, given the following information: Annual production of your factory in Blacksburg Virginia: 3000 widgets Number of production employees in your factory: 14 Number of non-production employees in your factory: 9 Average salary of your production employees: $60,000 Average salary of your non-production employees: $40,000 Monthly fixed costs to run the plant: $20,000 Employee benefits costs: 35% of Total Wages Shipping costs to customer in Germany: $200/widget Annual R&D; costs: $1,000,000 Annual equipment maintenance costs: 8% of Total Sales Annual production costs: 35% of Total Sales Raw material costs: 10% of Total Sales Marketing $1,000,000 Profit Expectation 8% of Total Sales Calculate the price that you should charge to sell one widget in Germany in US dollars, given the following information: Annual production of your factory in Blacksburg Virginia: 3000 widgets Number of production employees in your factory: 14 Number of non-production employees in your factory: 9 Average salary of your production employees: $60,000 Average salary of your non-production employees: $40,000 Monthly fixed costs to run the plant: $20,000 Employee benefits costs: 35% of Total Wages Shipping costs to customer in Germany: $200/widget Annual R&D; costs: $1,000,000 Annual equipment maintenance costs: 8% of Total Sales Annual production costs: 35% of Total Sales Raw material costs: 10% of Total Sales Marketing $1,000,000 Profit Expectation 8% of Total Sales

Explanation / Answer

Total costs till R&D =

14 * 60,000 + 9 * 40,000 + 20,000 + 0.35 * ( 14 * 60,000 + 9 * 40,000 ) + 3000 * 200 + 1000000 = 3,240,000

Let total sales = x

Cost = 3,240,000 + 0.08x + 0.35x + 0.1X + 1000000

Profit = 0.08x

So

x = 3,240,000 + 0.08x + 0.35x + 0.1X + 1000000 + 0.08x

0.39x = 4240000

x = 10871794.871794872

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