XYZ Ltd is introducing a new product. The company intends to hire machinery to manufacture the product at a cost of £200 000 per annum. However, this will only enable 60 000 units per annum to be produced, although additional machines can be hired at £80 000 per annum. Each machine hired enables capacity to be increased by 20 000 units per annum, but it is not possible to increase production beyond 90 000 units because of shortage of space. The minimum rental period is for one year and the variable cost is estimated to be £6 per unit produced. There are no other fixed costs that can be specifically traced to the product. Marketing management has estimated the maximum selling prices for a range of output from 50 000 units to 90 000 units. The estimates are as follows:

You are required to present relevant financial information to management for the pricing and output decision.

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Units sold Selling price () 50000 22 60000 70 000 80 000 90000, 900004 20 19 18 17 15 1200000 1330 000 1440 000 1530 000 1350000 Total sales revenue () 1100000