Answer(a)
Wafer manufacturing cost as given=5000 per wafer
wafer yield=90%=5000×90%=4500
Die yield= 65%=4500×65%=2925
Testing and packaging=4 per die= 2925×4=$11700
Test yield=85%=11700*85%=9945
variable cost =9945
fixed cost=$200M
volume= 400M chips
fixed cost per chips=200M/400m=0.5M dollar= 500000 dollar
Total cost per Ic chip= fixed+ variable=500000+9945=509945.
(b)
Reduce operating cost by 20%
Fixed cost=200M×(100-20%)=200M×80%=160M
fixed cost per chips=160M/400m=0.4M dollar= 400000 dollar
Total cost per ic now= fixed+ variable=400000+9945=409945
startegy2
Extra fixed research and development expenditure= 200M
now total= 200M+200M= 400M
fixed cost per chips=400M/400m=1dollar= 1000000 dollar
Total cost=1000000+9945=1009945
yield now=1009945×80%=807956
strategy 1 should be selected.because cost is less as compared to startegy2
Problem 1. A semiconductor company has the following costs associated with Product X Fixed cost of...
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