Stem Limited is operating in a very competitive market with volatile

prices for its products. Following a price reduction by a competitor, the

Galway branch is considering what the lowest price it is willing to sell its

product for in the short$-$term.

The branch has budgeted production of $10,000$ units for the coming

month. The costs for the month are budgeted to be:

Fixed overhead $40,000$

Variable overheads $20,000$

Labour $60,000$

Direct materials $30,000$

The labour cost relates to employees of the branch on long$-$term

contracts. If they were not working on this particular product, the

workers would work for another branch of the company and the Galway

branch would be reimbursed for their salaries, with no additional markup.

What is the lowest price that the Galway branch should be willing to

accept for its product in the short$-$term?

a$.16$ per unit

b$.15$ per unit

c$.11$ per unit

d$.5$ per unit