Information is available about the new product:

a$.$ An investment of $$1,200,000$ will be necessary to carry inventories and accounts recelvable and to purchase some new equipment needed in the manufacturing process. The company's required rate of return is $18\%$ on all investments.

b$.$ A standard cost card has been prepared for the sleeping pad, as shown below:

$\backslash$table$[[,$Standard Quantity,,$],[,$or Hours,Standard Price or Rate,Standard Cost$],[$Direct materials,$9$ yards,$$2\mathrm{.}40$ per yard,$21\mathrm{.}60],[$Direct labor,$5\mathrm{.}4$ hours,$$10\mathrm{.}00$ per hour,$54\mathrm{.}00],[$Manufacturing overhead variable$),5\mathrm{.}4$ hours,$$14\mathrm{.}00$ per hour,$75\mathrm{.}60],[$Total standard cost per pad,,,$$151\mathrm{.}20$