The sections which are discussed above are the most revenue generating sections of the company. The other important decision which the company has taken is combining the four sales areas into two which will help in reducing the liabilities of the company; but on the other hand, it will also raise pressure because of the competition in the market.The cost of the product always makes a difference in the overall market penetration of the products. The penetration in the market is dependent on the sales of the product and liking of the product. To manufacture the products and to do research and development on the product, it requires spending of the considerable amount. People who are involved in the research and development of the products are highly skilled, so they require a considerable amount of income. The other factor is the raw material and the things required to do research which are considered under the cost section of the company. The details of the cost that the company spends on different factors are mention in the image below. This shows the amount required to complete the requirement.
In the year 2013, the amount of cost which the company spends was $844 million because this was the time when the company was recovering from the bankruptcy case. After that in the year 2014, the amount which the company spends on the requirement was $712 million. It was quite less as compared to the previous years. This happened due to less penetration in the market; and due to the problem of bankruptcy, the work force of the company also got affected and reduced from 145000 to 8000. This was huge loss of work force, but the cost variate due to the change in the market position.There are significant sources from which the company gains fixed cost and variable costs: -Significant Fixed cost: – The fixed costs that company is paying are the hardware and spaces which the company has acquired.Variable cost: – the company has different variable cost but the most significant is the products accost according to the market. This is where the sales of the product line depend.