2. NEW IDEA Lid New Idea Lid is considering a proposal to manufacture an innovative handheld computer incorporating an in-built options, futures & derivatives calculator, organiser and worldwide clock. The new product would be targeted at the modern professional trader operating in slobal financial markets. A Management Consultant has been hired at a cost of 20,000 to conduct market research/feasibility study. The manufacture of this new product would require the use of an existing machine, which although having no alterative use, has a net book value in financial accounts of 100,000. This machine has a disposal value of 50,000 if the proposal was rejected. A new production line would have to be set up at an initial investment of 350,000. Maintenance costs for the production machinery are expected to total 60,000 pa. All of the above equipment will be sold at the end of the product life cycle for 100,000. A special promotional campaign will be mounted for the first year of the project at a cost of 250,000 with an additional advertising budget of 50,000 per annum for the remainder of the project's life. Estimated unit selling price and costs (excluding production machinery & promotion): Per Unit Selling Price 120 Less: Direct Materials Direct Labour Variable Overheads General Fixed Overheads (absorbed using direct labour hours Surplus 85 Specific fixed costs relating to distribution of the computer will be 30,000 p.a... Required Identify and discuss the relevant costs and revenues associated with the management decision to commence production of the new computer