Case Study: Strategic pricing of new product

ABC Limited is developing a new clothes dryer, Dry Master, that it plans to sell to coin operated laundries. Currently, the market leader is a product called Dry Well, which is sold by a competitor. The management accountant of the company is doing a market research to determine appropriate selling price for the new clothes dryer.

The management accountant gathered the following information regarding the cost of developing 400 new cloth dryer.