A process has a defective rate of 14%. Through 100% inspection all defective products are…
A process has a defective rate of 14%. Through 100% inspection all defective products are separated and sold to a scrap collector at 40% of its cost.
Each product costs $150 to construct or produce. The company applies a markup of 24% on all products for sale. Assume the total number of units to be 100.
Answer the following: The per unit sale price of “good” or “saleable” product is = $ ______________ .
- The Number of defects = ____ units
- Amount received from selling defectives = ___ units *defect rate * product cost = $___/unit
- Total cost incurred = Total units x product cost = $____ .
- Number of good products = Total units – Defective units = ___ units
- Company applies a markup of 24%.
- Total Revenue desired = (Total units * Unit cost) * (1 + markup) = $____ .
- Total Revenue = Revenue from good products + Revenue from defectives.
- Pricing = (Revenue from Good Products – Revenue from Defective Products) / Good Units
- Note: x and * are multiplication signs.