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Unformatted text preview: -1) Prefer this one. The Cost per unit adjusts to the level of production during peak and non-peak months. -2) This approach is a basic $3 cost throughout the year but you don’t make enough profit in peak months to cover for losts profit in non-peak months.-3) The price is too low, may not make enough profit.-4) May help cover costs when operating at peak-time.-5) If you sell more than capacity/what is expected, this approach may cost you more. Month Jan Feb March Apr May June July Aug Sept Oct Nov Dec Cost $87K $87K $87K $87K $87K $87K $87K $87K $87K $87K $87K $87K Production 24K 24K 24K 36K 36K 36K 36K 36K 24K 24K 24K 24K Cost/unit $3.63 $3.63 $3.63 $2.42 $2.42 $2.42 $2.42 $2.42 $3.63 $3.63 $3.63 $3.63...
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- Spring '08
- Key Strategic Issues, Customer Group Cost