Problem 13.30 (Return on Investment Pricing). Engineers Ltd, plans to introduce two products A and B in the market. These will be manufactured in Department X which will be treated as a profit centre. Production volumes and costs are estimated as follows: Product B Annual Production (Units) 3,00,000 5,00,000 Rs. per unit Direct Material Cost 150 180 Direct Labour Cost (Rs. 20 per hour) 300 420 The proportional of overheads other than interest, chargeable to two products A and B are as under: Factory Overheads (50% Fixed) 100% of Direct Wages. Administration Overheads (100% Fixed) 10% of Factory Cost. Selling and Distribution Overheads (50% Variable) Rs. 30 and Rs. 40 rspectively per unit of products A and B. The Fixed Capital Investment in the Department will be Rs. 2,500 lakhs. The Working Capital requirement is equivalent to six months' stock of Cost of Sales of both the products. To finance this project a term loan of 50% of Working Capital required has been obtained from a Financial Institution at an interest rate of 18% per annum. Department X is expected to give a return of 20% on capital employed. Required: (a) Unit Selling Prices for products A & B, such that the contribution per labour hour (rounded up to the next higher integer), is the same for both the products. (b) Statement of overall profitability expected