Part B York Limited are looking to produce a new vehicle-mounted PDA. Potential sales are 10,000 units at a 350 selling price. York Limited require a 15% return on sales.

i) Determine the total costs that York Ltd can incur and meet the profit objective? Using: Profit = Sales Revenue Total Costs Where, Sales Revenue = Selling price per unit x unit sales Return on Sales = Profit / Sales Revenue x 100%

ii) If York Ltd estimates that fixed costs would be 1.2 Million annually for this product. What is the maximum allowable variable cost per unit?