2. How much extra profit per year can be generated by deciding to centralize the purchasing of the bar stool inputs?

The current discount structure for bar stool from Savage Industries is as follows:

• Material cost of inputs at a quantity between 350,000 or below are $8.00 per unit.
• Material costs of inputs at a quantity between 350,001 and 700,000 are 5% less per unit.
• Material costs of inputs at a quantity greater than 700,000 are 10% less per unit.
• Production labor cost: $4.00 per unit Machinery cost: $4.00 per unit.
• Corporate overhead: $2.00 per unit.

• Question 2 Check Figure #1 - 10% off the original price is $0.80.
• Question 2 Check Figure #2 - The formula for the total unit cost is Material + Labor + Machine + Overhead Cost
• Question 2 Check Figure #3 - Selling price - Unit Cost = Profit. The profit per unit is $2.80.