1. Given : Data below from a VA study
Current Selling Price /Unit = $95
Cost / Unit = $58
Current annual demand = 30,000 units.
Material cost reduction through value analysis = $2.50 /unit.
Labor cost reduction through value analysis = $3/unit
Cost increase in sales promotion = $1.50 /unit
It is proposed to charge the following rates for the product after the value analysis study.
For the first 10,000 units at $110.
Next 5,000 units at $100
Any quantity sold after 15,000 units at $105.
The value analysis and the marketing teams spent 60 and 40 hours at a cost of $120 and $100 respectively.
What is the profit after the value analysis study for the first 10,000 units with the new price?
What is the profit for the next 10,000 units with the new price?
What should be the sales volume to realize a profit of $0.75M in the first year after paying for the value analysis study?
2. Galaxy Systems has operations in two locations, one in Asia and another one in South America. The following data has been collected from both the locations.
Determine which location has better labor, material, capital and total productivity.
|Labor||10,000 hrs @ 10/hr||15,000 hrs @ 12/hr|
|Output||1,000,000 $ 5/ unit||2,000,000 $ 4/unit|