The Company of Corporate Conglomerations (3C) has recently developed a new product. The product is expected to be sold to the consumer at $40 a unit. The dealer margins are estimated to be 25%. 3C gave the following projections for the product's cost: $5 per unit on materials, $3 per unit on labor, and $2 per unit on shipping.

The sales forecast was 2,000,000 units for the first year. This was lower than their target. Therefore, 3C decided to increase the quality and maintain the price of the product to increase demand. The product will now cost an extra $5 dollars per unit for 3C while the manufacturer's selling price remains the same.