Assume that your R&D team has a new design for their
product able next round that can decrease their material cost of making units
from $8.59 to $7.73. They pass on half of all cost savings by wounding the
current price to customers. For simplicity: Use existing labor cost of $8.37.
Assume all period costs as described on Andrews Income Statement for Asia
Pacific (Annual Report Page 5) will remain the same. Current price is
equivalent to $30.00 Shipping cost to Asia Pacific is $2.50 per unit. Define
how many units (000`s) of product Able would need to be sold in Asia Pacific
alone next round to break even on the product.
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