Homework answers / question archive / The team managerial challenge is the case "Profit Margins on the Amazon Kindle" (Chapter #8 pg

The team managerial challenge is the case "Profit Margins on the Amazon Kindle" (Chapter #8 pg

Business

Share With

The team managerial challenge is the case "Profit Margins on the Amazon Kindle" (Chapter #8 pg. 306). Please answer questions 1 and 3 only, use a table to list/display the variable and fixed cost, show your calcuations for the contribution margin, and include a reference list for required sources the group uses to complete the assignment.

Profit Margins on the Amazon Kindle8 Amazon’s tablet computer, the Kindle Fire, has slim margins at its $199 retail price. Admittedly, this product is trying to change the way we read books. It is therefore positioned so as to penetrate a revolutionary new target market, the twentysomethings who are comfortable never actually holding hard copies of their textbooks, novels, newspapers, or magazines. Listed here is data on hardware components, software licensing, and other costs: display screen $35, touchscreen $25, assembly labor $11, battery $12, processor chip $18, cost of Kindle advertising campaign $7, DRAM memory chip $5, software licenses $37, 8 GB memory module $8, plant manager salary $6, hardcase and other materials $34, R&D expense $12, FEDEX delivery to customer household $14.

Questions 1. Categorize the listed costs as variable or fixed and calculate a contribution margin percentage defined as the net sales price minus variable costs as a proportion of the net sales price.

3. What about Apple iPads? Why would their margins be higher? Be specific.