The Design Engineer's Preliminary Estimate of a Product's Design,production,and Distribution

question 98

Multiple Choice

The design engineer's preliminary estimate of a product's design,production,and distribution costs is $1,163 per unit.Market research shows potential customers are willing to pay up to $1,512 for the product.If the desired profit is 30 percent of target cost,should the company make the product?

• A)No,the market price only allows for a 23% profit at this cost.
• B)Yes,with only slight modifications to cost.
• C)Yes,the desired costs and profit are right on target.
• D)Yes,the market price will allow for a profit that exceeds the target.

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Definitions:

Trade Patterns

The trends and tendencies in international trade, including what goods and services are traded, with whom, and in what direction.

Gain From Trade

The gain from trade refers to the increase in consumer and producer surplus that results from an open market, allowing countries or individuals to specialize in production and exchange.

Carrots

Commonly known as a root vegetable, orange in color, and widely used in cooking for its sweet flavor and nutritional value.

Peas

A small green seed or the seed-pod of the Pisum sativum, commonly consumed as a vegetable.