On April 24, 2015, Apple entered the wearable technology market with the release of its Apple Watch. A May 1, 2015, article published in The Wall Street Journal estimated that the cost of materials and labor required to produce the watch totaled $83.70. The Apple Watch's retail price is $349.

Required

a. What percentage of the retail price is accounted for by the cost of materials and labor?

b. What is the markup dollar amount on the watch?

c. What is the markup percentage on the watch?

d. Estimates for the iPad mini 2 place materials and labor cost at 45% of the retail price. If Apple had wanted to maintain that same relationship between materials and labor cost and retail price for the Apple Watch, what price would Apple have set for the watch?

What markup percentage would have yielded this price?

e. Why do you think Apple chose to use a higher markup percentage for the Apple Watch than for the iPad mini 2?