The Ferris company is planning on launching a new product in the high tech market, Flux on
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Question:
The Ferris company is planning on launching a new product in the high tech market, Flux on Jan. 1st. They plan on pricing Flux at $44.00. The direct material cost is $19.00 and the direct labor is $10.00 per sensor. The total cost of equipment to produce Flux is $5,000,000. The equipment has no salvage value and is depreciated over 15 years. They are planning on having a promo budget of $1.5M and a sales budget of $1.2M. Assuming there is no inventory carrying costs and no other fixed costs, what will the net margin (net profit) be for Flux, if they sell 400,000 units of Flux?
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