acct3341 - seems to sell itself.” 5 We would suggest...

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4. As we mention in (3). The true cost of producing Y-30 should be $304.80 per unit. And the low sales price of Y-30 was mislead in to believing that $228 was the production cost. In the paragraph, it says “the Saki Company in Japan started to bring out a Y-30 but discovered they couldn’t touch our price.” This means the company has a very low sales price of Y-30; the competitors could not bit the price since it’s too low. When you have the lower price, the demand of your product must be increased. Besides, from the Income statement, we can tell that the company is selling Y-30 without making any profit. In this case, the low sales price makes Y-30 “just
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Unformatted text preview: seems to sell itself.” 5. We would suggest using Acitvity-based costing system. “The ABC system are likely to yield the most benefits when indirect costs are high percentage of total costs or when products and services make diverse demand on indirect resource. The main costs of ABC systems are the difficulties of the measurements necessary to implement and update the system.” (Horngren) I can’t tell exactly which strategy should we use to improve profit. Could you please complete the answer? Thank you so much~~...
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