A company believes it can sell 5,000,000 of its proposed new optical mouse at a price of $11.00 each. There will be $8,000,000 in fixed costs associated with the mouse. If the company desires to make a profit $2,000,000 on the mouse, what is the target variable cost per mouse?
A company estimates that ordering costs are $2.00 per order, picking costs are $1.00 per unique item ordered, packing costs are $0.07 per item, and return costs are $40.00 per return. A customer orders $8,000 worth of goods with direct costs of $6,200. The customer places 70 orders, orders 24 unique items, 940 total items, and makes 7 returns. What is the customer profit (loss)?
There are two problems. Solution to first problem depicts the steps to calculate the target variable cost per unit. Solution to second problem calculates the profit/loss of a customer.