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QUESTION NINE A company could sell 100,000 units per annum of a new product at a competitive market price of K80 per unit. Capital

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QUESTION NINE A company could sell 100,000 units per annum of a new product at a competitive market price of K80 per unit. Capital investment of K10,000,000 would be required to manufacture the product. The company seeks to earn a return on initial capital employed of 15% per annum.Preliminary costings show that prime cost is likely to be K40 per unit. What is the target cost per unit of the new product. (5 Marks)

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