a b c or d

7 Product Profitability: Sesame Ltd makes two bands of luxury pillow. The "Bert" has variable costs of 5, and the "Ernie" has variable costs of 8. They utilise a markup of 100%. Annual sales of Berts is 20,000 units and for Ernies is 10,000 units. Sesame has fixed costs of 60,000 per annum. The company is reviewing a proposal to add the "Oscar" to their range. This is expected to sell 8,000 units per annum at a variable cost of 10. Producing the Oscar would require halving production of either Bert or Ernie. If Oscar also has a 100% markup, what would be the profit per annum of the optimal outcome? a) 220,000 b) 120,000 c) 150,000 d) 160,000