Dallas Ltd, a new start-up company, has successfully developed a new ultra-light mobile phone that comes with a 20-megapixel front and rear camera, 512 gigabyte of storage and has a 50% longer battery life than all the other mobile phones currently sold in the market. Given that the company has already incurred research and development costs of 5 million, it wants to ensure that the price it will charge for the product is set at the right level. To support with the pricing decision, the management accountant of Dallas Ltd has provided in the table below the budgeted production costs at various levels of activity. Within this range of activity, there are no step-up in fixed costs. Annual Production (units) 4,000 7,500 10,000 12,000 Production Costs Direct Material 480,000 900,000 1,200,000 1,440,000 Direct Labour 360,000 675,000 900,000 1,080,000 Overheads 1,380,000 1,537,500 1,650,000 1,740,000 Dallas Ltd plans to produce and sell 6,000 units of the product during the first year and non-production costs, all of which are fixed, will be 500,000. The company does not produce or sell any other products. REQUIRED (a) Calculate the selling price that Dallas Ltd will set if it uses a marginal cost- plus pricing policy and applies a 200% mark-up to the marginal cost (variable cost) of the product. [5 marks] (b) Calculate the selling price that Dallas Ltd will set if it uses a full cost-plus pricing policy and applies a 100% mark-up to the full production cost of the product. [5 marks] (c) This emphasis of traditional cost control systems tends to be more on cost containment rather than cost reduction. Strategic cost management on the other hand is more focused on cost reduction and continuous improvement, rather than just cost containment. Critically discuss how the management accountant can support a company such as Dallas Ltd to actively reduce its costs and make continuous improvement in its products and operations. [Maximum of 800 words] [15 marks]