Question 1 - yes, if matieral prices go up, this makes the model 5200 less attractive since the matieral costs per unit are currently .40 vs .38 on model 2600.
Question 3 - If the price of labor goes up by 25% this makes the model 5200 even more attractive since it currently has a significantly lower labor cost per unit than model 2600.
Attachment:- Case-13-33.pdf