Sasha Cat Company Sells One of Its Products for $100

question 73

Multiple Choice

Sasha Cat Company sells one of its products for $100 each.Sales volume averages 750 units per year.Recently,its main competitor reduced the price of its product to $80.Sasha Cat Company expects sales to drop dramatically unless it matches the competitor's price.In addition,the current profit per unit must be maintained.Information about the product (for production of 750) is as follows: $\begin{array}{lrrr} &\underline{\text { SQ}}&\underline{\text { AQ}}& \underline{\text { Actual Cost}}\\\text { Materials (kilograms) } & 2,000 & 2,500 & \$ 25,000 \\\text { Labour (hours) } & 450 & 500 & 12,500 \\\text { Setups (hours) } & 0 & 600 & 7,500 \\\text { Material handling (moves) } & 0 & 300 & 3,750 \\\text { Warranties (number repaired) } & 0 & 200 & 15,000\end{array}$
What is the non-value-added cost per unit?

• A)$38.33
• B)$40.47
• C)$41.67
• D)$43.33

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Definitions:

Land Reform

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