0 beta units. Production costs are based on a production quantity of 100,000 units. In general, lower costs are expected to be associated with higher production quantities, assuming that production capacity, facilities, and warehousing and distribution are adequate for the quantities produced.4.1.1 Development CostsDevelopment costs for the SmartWave include product research and development costs, tooling and facilities costs, and production and testing costs associated with making the initial beta test units.4.1.1.1 Research and DevelopmentProduct research and development for the SmartWave includes product research and requirements analysis, specification development and documentation, and product design and documentation. Cost targets for research and development are listed as follows. Refer to the detailed cost breakdown, SmartWave, Inc. Internal Document No. 2001.fin.10021 [11] for a detailed breakdown of these costs.4.1.1.2 Tooling and FacilitiesTooling and facilities costs include all costs associated with the development and production of special tooling and fixtures for producing the components of the SmartWave. In addition, they include costs of facilities and equipment to be used in the limited initial production and subsequent full-scale production runs for SmartWave products. The following is a summary of these costs. More detail can be found in 2001.fin.10021.4.1.1.3 Beta Production and TestingCosts for the limited initial (beta) production run of SmartWave units is targeted at $65.94 for an initial production quantity of 10,000 units. Costs of testing are targeted at $5.75 per unit, for a total of $71.69, as summarized below. Supporting detail can be found in the detailed cost breakdown, document No. 2001.fin.10021.4.1.2 Production CostsAfter the limited initial production and successful beta testing of the SmartWave product and receipt of management approval to proceed, full-scale production and deployment will b...
