A jewel case for a compact disc is made from polycarbonate ($2.20 per lb) by a thermoplastic molding process. Each CD case uses 20 grams of plastic. The parts will be made in a 10-cavity mold that makes 1400 parts per hour at an operating cost of $20 per hour. Manufacturing ovehead is 40%. Since the parts ae sold in large lots, the G&A expenses are a low 15%. Profit is 10%. What is the estimated selling price for each CD case?
Solutions:
jewel case = 20 gram ($ 2.20/lb)
OH = 40%
G&A = 15%
Profit = 10%
1 lb = 454 gram
1 gram = 2.2x10^-3 lb
10(2.2x10^-3) = $ 0.097/unit
$20/1400 = $ 0.014 per unit
Total cost = 0.097 + 0.014 = $ 0.111
Cost/hour = $0.111 x 1400 = $155.40
0.4 x 155.4 = $ 62.16
0.15 x 155.4 = $ 23.31
Total = 155.4 + 62.16 + 23.31 = $ 240.87
Profit = 1.1 x 240.87 = $ 264.96
Estimated selling price/unit = $ 264.96/1400 = $ 0.19/unit
Solutions:
jewel case = 20 gram ($ 2.20/lb)
OH = 40%
G&A = 15%
Profit = 10%
1 lb = 454 gram
1 gram = 2.2x10^-3 lb
10(2.2x10^-3) = $ 0.097/unit
$20/1400 = $ 0.014 per unit
Total cost = 0.097 + 0.014 = $ 0.111
Cost/hour = $0.111 x 1400 = $155.40
0.4 x 155.4 = $ 62.16
0.15 x 155.4 = $ 23.31
Total = 155.4 + 62.16 + 23.31 = $ 240.87
Profit = 1.1 x 240.87 = $ 264.96
Estimated selling price/unit = $ 264.96/1400 = $ 0.19/unit