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I magine you are buying gaskets. Your supplier calls you up with bad news: The...

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Accounting

I magine you are buying gaskets. Your supplier calls you up with bad news: The workforce voted to unionize. Labor costs are now going up by 35%! He asks you for a 22% increase in pricing. He tells you that because you are a "customer of choice," he doesn't want to pass all of the costs to you. You look at your most recent cost breakdown for gaskets (shown below). What are you going to tell the supplier? What is the highest percentage price increase you are willing to accept? Explain briefly your work. You do not need to stay within the word limit for this prompt.

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Supplier Cost Breakdown for Gaskets Labor $3.00 Material $3.00 Overhead $6.00 Tooling $1.00 Total Factory Cost $13.00 SG&A $1.40 Total Cost $14.40 Profit (Industry Standard 10%) $1.44 Price Paid $15.84

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