Hello, this is Assignment #5 for my Globalization class. You will be using a past assignment I did called Assignment 2 to complete this. Below you will see the instructions for this assignment. I have also attached assignment #2 for you to use. Remember please use simple language to imitate the writing of a sophomore in college. Thank you and good luck.
Take the same item you used for Assignment 2.
Recall the price, the main material, and the country where it was made (as shown in the label, or as indicated on the website)
Your task is to estimate how much money the seller makes on each unit of this item that the retailer sells. We call this the “margin.”
To do this, you need to find out these costs:
1. Material: the main material used (do not worry about lining, buttons, etc.): find the price for every yard of the material.
Assume that 2 yards are needed to make one item. Then, the material cost for each unit of the item is the price per yard multiplied by 2.
For example, if your material is cellulose, and each yard of cellulose sheeting costs $3, then the cost of the material for your item is $3 x 2 = $6
2. Labor: Find the average wage rate per hour in the country where the item was “made” of origin.
If you can only find it in the local currency, use the excel table I have uploaded here to multiply the value in local currency by the “dollars per currency unit” number in the spreadsheet. For example, if the item was “made” in Tonga and the average wage in Tonga’s currency, Pa’anga, is 25 Pa’anga per hour of work, then multiply 25 by 0.4230 to get the wage in US dollars, $10.58 per hour.
If you can only find the wage per week, month, or year, assume that in one week there are 40 working hours, in one month 170 working hours, and in one year 2000 working hours.
Assume that it takes one hour to make the item. Then, the cost of labor for each unit of the item is simply the hourly wage rate in US dollars. For example, if the hourly wage is $10.58 per hour, the cost of labor for your item is $10.58.