Given the price information given in Exhibits 1 and cost information for both companies in Exhibits 2 & 3, find the average variable cost of making a video game produced by Sony and Microsoft.

 

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+ Exhibit 1: Prices and projected annual sales volumes for Sony PlayStation 3 and Microsoft Xbox 360 Elite PS3 price $299 299 399 399 Units produced (in 8.25 Millions) Production Labor Materials & Parts Exhibit 2: Sony PlayStation 3 Production Costs per unit in dollars Units produced (in 7.00 Millions) Production Labor 78 Materials & Parts Overhead 64.29 Distribution 50 Per Unit Total Cost 98 180 168 7.50 69 Xbox 299 399 299 399 80 60.00 50 8.75 9.25 9.75 10.25 10.75 161 62.86 59.46 40 40 67 62 155 172 167 8.00 8.50 56 161 56.25 52.94 50 40 55 PS3 projected number of Xbox projected number units sold (millions) of units sold (millions) 11.25 11.25 11.75 7.0 8.25 12.5 8.75 8.0 145 143 56.41 40 9.00 52 156 45 50.00 40 Overhead 66.67 Distribution 40 Per Unit Total Cost 372.67 343.86 321.46 296.41 281.66 270.16 260.89 244.81 241.90 $243.14 Exhibit 3: Microsoft Xbox 360 Elite Production Cost per unit in dollars 53.66 40 9.50 38 48 141 11.25 32 51.16 48.89 40 40 46 140 153 149 47.37 45.00 40 40 10.00 11.00 44 146 11.75 40.91 40 28 140 11.50 46.81 44.60 30 30 44 12.25 145 26 39.13 30 141 44 12.75 144 28 37.50 30 142 12.00 12.50 43.14 30 44 144 36.00 30 372.29 351.00 335.25 309.94 298.00 288.37 280.00 270.91 258.13 255.50 254.00 + Exhibit 1: Prices and projected annual sales volumes for Sony PlayStation 3 and Microsoft Xbox 360 Elite PS3 price $299 299 399 399 Units produced (in 8.25 Millions) Production Labor Materials & Parts Exhibit 2: Sony PlayStation 3 Production Costs per unit in dollars Units produced (in 7.00 Millions) Production Labor 78 Materials & Parts Overhead 64.29 Distribution 50 Per Unit Total Cost 98 180 168 7.50 69 Xbox 299 399 299 399 80 60.00 50 8.75 9.25 9.75 10.25 10.75 161 62.86 59.46 40 40 67 62 155 172 167 8.00 8.50 56 161 56.25 52.94 50 40 55 PS3 projected number of Xbox projected number units sold (millions) of units sold (millions) 11.25 11.25 11.75 7.0 8.25 12.5 8.75 8.0 145 143 56.41 40 9.00 52 156 45 50.00 40 Overhead 66.67 Distribution 40 Per Unit Total Cost 372.67 343.86 321.46 296.41 281.66 270.16 260.89 244.81 241.90 $243.14 Exhibit 3: Microsoft Xbox 360 Elite Production Cost per unit in dollars 53.66 40 9.50 38 48 141 11.25 32 51.16 48.89 40 40 46 140 153 149 47.37 45.00 40 40 10.00 11.00 44 146 11.75 40.91 40 28 140 11.50 46.81 44.60 30 30 44 12.25 145 26 39.13 30 141 44 12.75 144 28 37.50 30 142 12.00 12.50 43.14 30 44 144 36.00 30 372.29 351.00 335.25 309.94 298.00 288.37 280.00 270.91 258.13 255.50 254.00

Answer rating: 100% (QA)

Average Variable Cost Calculation for Sony Calculation Table 1 Unit Produced in Millions 825 875 925 ... View the full answer