Question: Aukey lamp is a smart lamp that allows the users to adjust the brightness and change the colors by touching the aluminum base. The following

 Aukey lamp is a smart lamp that allows the users to

Aukey lamp is a smart lamp that allows the users to adjust the brightness and change the colors by touching the aluminum base. The following is their typical monthly sales and costs. Sales 5,000 units Retailer price $25.00 per unit Variable costs $10.00 per unit Fixed costs $45,000 The management of Aukey wants to expand its distribution channel by selling it through an e-commerce platform. To make it competitive with the other smart lamp brands, Aukey would need to adjustits price to $20.00 per unit. It is expected that the additional sales through the e-commerce platform can reach 3,000 units. a. 10 points Identify relevant costs in the proposed price change. Briefly explain why you think they are considered as relevant costs. b. 10 points Calculate the break-even sales change related to the proposed new price. Show your calculation. c. 10 points Explain how you interpret the results of your calculation in question (b). d. 10 points Based on the available information should Aukey go ahead with selling their product through the e-commerce platform? Explain your answer. e. 10 points Lighting Ever, another smart lamp brand, introduced its product in the same e-commerce platform at $17 per unit. Lighting Ever offers similar features as Aukey's. Aukey's management predicts that Lighting Ever's price may impact in 10% reduction of its sales if Aukey keeps its price at $20. Calculate the break-even sales change for reactive pricing. Show your calculation. f. 10 points Based on the results of your calculations in question (e), please explain whether Aukey should match Lighting Ever's price or not. Explain your reasons

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