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Price per connector: - The price per electronic connector is $3.00 ...

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Accounting

Price per connector:

$-$ The price per electronic connector is $ $3.00$

$-$ Expect a price inflation factor of $2.5 %$ per year $($ for the next $10$ years $)$

$-$ The customer is asking for a quantity discount if the quantity ordered is in excess of $500, 000$ units

Quantity Demand:

$-$ The customer has indicated that the first $-$ year orders will be around $1, 000, 000$ units. $($ looking for quantity discount $)$

$-$ The customer feels that after the first $500, 000$ units are ordered, there will be a price discount of $10 %$ on all purchases.

$-$ The customer has also indicated that if the product works as suspected, they will order an additional $2.5 %$ each year for the next $10$ years.

Fixed Cost $($ Overhead $)$

$-$ The fixed overhead for this project would initially be $ $500, 000,$ and that will hold until the number of units produced exceeds $1, 400, 000 .$

$-$ Above $1, 400, 000$ units $= >$ need an additional fixed cost of $ $100, 000$

$-$ Fixed costs will increase $2.5 % ($ inflation rate $)$ in $10$ years

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