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  1. business
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  3. price per connector: - the price per electronic

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

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Question

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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