Cost accounts. somebody help

rohit (student) (132 Points)

07 June 2011  

A company produces 400000 components of machinery annualy at 80% of full capacity. regular selling price of the component is 33. Budgeted annual production costs and other expenses for the year are as follows:-

Raw material cost per unit                                                                                                               Rs.4.25

Direct labour cost per unit                                                                                                                Rs.5.75

Variable factory overhead per unit                                                                                                    Rs.7.75

Variable selling cost                                                                                                                           5% of selling price

Fixed factory and administrative  overheads                                                                                  3950000

During the year, the company received a one time order to sell 25000 components for which no selling expenses will be incurred. What should be the minimum price quoted by the company if it wants to earn minimum of rs.1per component on this order?