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For DJC, depreciation cost contributes 6.89% to its total product cost whereas for ACC it is 15.09%. Overall production cost for DJC is lower by $7.69 when compared to ACC.
DJC’s potential in US market is analyzed in exhibit (3). DJC’s expected total product cost in US is lower by $5.859 when compared to its Kawasaki plant...
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This significant cost advantage is due to the less material cost in US market. When we compare DJC’s potential cost structure in US with ACC, cost difference increases to $13.549 per 1000 units. This clearly indicates the prospects for DJC in US market.
Elemental cost analysis is performed for both ACC and DJC’s potential US plant...
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