Maji-Maji enterprise manufactures lighters. He sells his product at Sh.20 each and makes profit of Sh.5 on each lighter. He worked 50% of his machinery capacity at 50,000 lighters. The cost of each lighter is as under; Sh.

Direct material 6

Wages 2

Works overhead (50% fixed) 5

Selling expenses (25% variable) 2

His anticipation for next year is that the costs will go up as under;

Fixed charges 10%

Direct labor 20%

Material 5%

There will be no change in selling price. There is an additional order for 20,000 lighters in the next year.

Required: what is the lowest rate he can quote so that he can earn the same profit as the current year?