題組內容

1. NTPU Company is about to enter the highly competitive personal electronics market with a new optical reader. In anticipation of future growth, the company has leased a large manufacturing facility and has purchased several expensive pieces of equipment. In 2018, the company's first year, NTPU budgets for production and sales of 24,000 units, compared with its practical capacity of 48,000. The company's cost data are as follows:

Required:

(2)NTPU enters the market with the selling price computed previously. However, despite growth in the overall market, sales are not as robust as the company had expected, and a competitor has priced its product $15.6 lower than NTPU's. Stark, the company's president, insists that the competitor must be pricing its product at a loss and that the competitor will be unable to sustain that. In response, NTPU makes no price adjustments but budgets production and sales for 2019 at 18,000 units. Variable and fixed costs are not expected to change. Compute NTPU's new selling price. Comment on how NTPU's choice of budgeted production affected its selling price and competitive position. (4%)