Problem:
Lambda Computer Products competed for and won a contract to produce two prototype units of a new type of computer that is based on optics using lasers rather than on electronic binary bits. The first unit produced by Lambda took 5,000 hours to produce and required $250,000 worth of materials, equipment usage and supplies. The second unit took 3,500 hours and used $200,000 worth of materials, equipment usage and supplies. Labor is $30.00 per hour.
You were asked by your customer to present a bid for 10 additional units as soon as the second unit was completed. Production would start immediately. What would your bid be?