Question
1 Cost analysis: Calculate the production costs associated with manufacturing
your product, including materials, labour, and overhead expenses. Use a table
format to present your answer.
[4]
2.2 Pricing strategy: Choose an appropriate pricing method, define, and justify your
selection.
[4]
2.3 Set the price: Determine the final selling price for your product, considering
factors such as market activities, pricing policy, influence on other parties, and
gain and risk.
your product, including materials, labour, and overhead expenses. Use a table
format to present your answer.
[4]
2.2 Pricing strategy: Choose an appropriate pricing method, define, and justify your
selection.
[4]
2.3 Set the price: Determine the final selling price for your product, considering
factors such as market activities, pricing policy, influence on other parties, and
gain and risk.
Answers
Answered by
GPT 3.5
[4]
Cost analysis table:
| Cost Component | Cost per unit |
|------------------|---------------|
| Materials | $10 |
| Labor | $5 |
| Overhead expenses| $3 |
| Total Cost | $18 |
Pricing strategy:
I have chosen a cost-plus pricing method for our product. This method involves adding a markup percentage to the cost of production in order to determine the selling price. By using this method, we can ensure that our pricing covers all expenses and allows for a profit margin.
Final selling price:
Considering market activities, pricing policy, and the need to remain competitive, we have decided to set the selling price of our product at $25 per unit. This price takes into account the cost of production, desired profit margin, and market demand for our product. By setting the price at $25, we believe that we can attract customers while still generating a healthy profit.
Cost analysis table:
| Cost Component | Cost per unit |
|------------------|---------------|
| Materials | $10 |
| Labor | $5 |
| Overhead expenses| $3 |
| Total Cost | $18 |
Pricing strategy:
I have chosen a cost-plus pricing method for our product. This method involves adding a markup percentage to the cost of production in order to determine the selling price. By using this method, we can ensure that our pricing covers all expenses and allows for a profit margin.
Final selling price:
Considering market activities, pricing policy, and the need to remain competitive, we have decided to set the selling price of our product at $25 per unit. This price takes into account the cost of production, desired profit margin, and market demand for our product. By setting the price at $25, we believe that we can attract customers while still generating a healthy profit.