If e. procurement sells more than 10,000 packages, Wang receives an additional $8 for each package sold beyond the 10,000 level. Q.1. What is the unit cost to ECG of Wang’s software code included in its e. procurement package if it sells (a) 2,000 packages, (b) 6,000 packages, (c) 10,000 packages, and (d) 20,000 packages? Comment on the results. Q.2. To predict ECG’s total cost of using Wang’s software code in e.procurement, which unit cost (if any) of (a) to (d) in requirement one would you recommend ECG use? Explain. Total Costs and unit costs. Susan Wang is a well-known softwareengineer. Her specialty is writing software code used to maintain credit-card information security. Wang is approached by the ElectronicCommerce Group (ECG). They offer to pay her $ 100,000 for the right touse her code under license in their e. procurement software package.Wang rejects this offer because it gives her no upside if the e.procurement package is a runaway success. Both parties eventuallyagree to a contract in which ECG pays Wang a flat fee of $100,000 for theright to use the code in up to 10,000 packages. If e. procurement sellsmore than 10,000 packages, Wang receives an additional $8 for eachpackage sold beyond the 10,000 level. Q.1. What is the unit cost to ECGof Wang's software code included in its e. procurement package if it sells(a) 2,000 packages, (b) 6,000 packages, (c) 10,000 packages, and (d)20,000 packages? Comment on the results. Q.2. To predict ECG's totalcost of using Wang's software code in e. procurement, which unit cost (ifany) of (a) to (d) in requirement one would you recommend ECG use?Explain.

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Answered: Total Costs and unit costs. Susan Wang…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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If e. procurement sells more than 10,000 packages, Wang receives an additional $8 for each package sold beyond the 10,000 level. Q.1. What is the unit cost to ECG of Wang’s software code included in its e. procurement package if it sells (a) 2,000 packages, (b) 6,000 packages, (c) 10,000 packages, and (d) 20,000 packages? Comment on the results. Q.2. To predict ECG’s total cost of using Wang’s software code in e.procurement, which unit cost (if any) of (a) to (d) in requirement one would you recommend ECG use? Explain.

Total Costs and unit costs. Susan Wang is a well-known software
engineer. Her specialty is writing software code used to maintain credit-
card information security. Wang is approached by the Electronic
Commerce Group (ECG). They offer to pay her $ 100,000 for the right to
use her code under license in their e. procurement software package.
Wang rejects this offer because it gives her no upside if the e.
procurement package is a runaway success. Both parties eventually
agree to a contract in which ECG pays Wang a flat fee of $100,000 for the
right to use the code in up to 10,000 packages. If e. procurement sells
more than 10,000 packages, Wang receives an additional $8 for each
package sold beyond the 10,000 level. Q.1. What is the unit cost to ECG
of Wang's software code included in its e. procurement package if it sells
(a) 2,000 packages, (b) 6,000 packages, (c) 10,000 packages, and (d)
20,000 packages? Comment on the results. Q.2. To predict ECG's total
cost of using Wang's software code in e. procurement, which unit cost (if
any) of (a) to (d) in requirement one would you recommend ECG use?
Explain.

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