XYZ Ltd is a company manufacturing and selling Cabinets.

The estimated operating income of the company is presented herewith below:

Total

$

Units 500 Nos

Sales 470000

Less: Cost of Goods Sold

- Direct material 120000

- Indirect Manufacturing 110000

Total cost of goods sold 230000

Gross profit 240000

Selling Expenses

- Sales Expenses 47000

- Distribution 30000

Total Selling Expenses 77000

Profits before Admin expenses 163000

Admin Salaries 40000

Other Admin expenses 60000

Total Admin Expenses 100000

Net Operating Income 63000

1. What is cost average revenue and cost per unit and what is the net average earning for

each cabinet?

2. If the company is able to price the product on total cost plus 10% margin, what should

be price of the product?