Question

Describe Apple products, and the specific manufacturing costs it incurs. Categorize each cost into the three manufacturing cost categories and state if the costs are variable, fixed, or mixed. Explain how you came to your conclusions.

Answer 1

Dear sir/madam thanks for wonderful question, It was so interesting and exited to answer my level best.

To describe apple products, Just rise the question that why should we buy apple products first. This gives all the answers about products.

As per recent surveys and interviews people trends are going towards apple products because, They care about building community around Apple Stores.

I will take following example to describe the costs

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The iPhone XS and iPhone XS Max start at $999 and $1,099, and go up to $1,349 and $1,449

Although there are many ways to make these prices more tolerable, they are anything but inexpensive. And how much does the production cost Apple? The first bill of materials for the 256 GB iPhone XS Max, priced at $1,249, states the development of this version cost Apple only $443.

Here is the manufacturing cost structure of the company based on parts

Display 120 Cameras 37.6 Mechanical/electromechanical components 71.5 Apps processor 30 RF chipset 17 Power management ICs 12.55 WLAN/BT modules 7 Memory 40.75 RF/PA Section 15.5 User interface 9.7 TrueDepth Sensing Suite 13.5 1.15 Sensors Battery pack(s) 6.5 7.25 Box contents 60 140 20 40 80 100 120 Manufacturing costs in U.S. dollars

Coming to cost categories:

we will take example of iphone 4s because of clear available information

Material cost:

A description of the parts that make up the iPhone 4S was provided by Sum of Its Components iSuppli, which is known for its cost analysis of device product. The most simple 16 GB version has a bill of $188 worth of materials. That number is far from the $649 selling price.

Labor costs:

Of course, labor costs associated with the manufacture of this complex piece of kit, but recent investigations suggest that they certainly do not bridge the gap between the cost of materials and the price of sales.

Earlier this year, ABC's "Nightline" show went to the Foxconn Chinese factories, where most of the world's Apple products-iPads, iPhones and Mac computers-are produced. The investigation revealed that workers earn only $1.78 per hour, work long hours, and live in dorms with fellow workers.

Asymco analyst Horace Dediu used the "Nightline" study to estimate that Apple charges labor costs between $12.50 and $30 for every iPhone it produces, which reflects only 2-5 percent of the iPhone's selling price.

The New York Times harshly criticized Apple's factories ' labor practices and published an interview with a former Foxconn employee who said, "Apple never cared about anything but the product quality and reducing production costs.... Welfare of employees has nothing to do with the interests of[ Apple]."

Profit:

So if the components cost approximately $188, and Dediu has estimated that an additional $93 is spent on the production of its smartphone (a price that includes labor costs, shipping, processing and warranty costs) we hit a total of approximately $281 to produce an iPhone that retails at $649. This is a gain of $368 per iPhone for Apple.

I hope i value added some knowledge for your valuable question.

I will be happy if you give me a nice comment and credit for me sincere effort. A heatful thanks once again