I received the quotation from Innogetic Technologies for the non-recurring development cost; and for the per-unit production cost. I have begun the process of evaluating the quoted costs: I started with the development cost by making my own estimate on the number of person-hours - this estimate is based on my experience and knowledge of what it takes to develop this product. Next I divided their dev cost by the hours to get a per-hour rate. Then compare this estimated rate with professional rates in China.
To get the production cost, I made my own costed Bill of Materials (BOM) adding in estimated transformation cost (mfg cost), and of course the Chinese 17% VAT tax. This will help me judge the quotation to find out if it is reasonable or if further negotiation is necessary.
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