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b) PST Limited is a cement block production company. It has developed a...

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Accounting

b) PST Limited is a cement block production company. It has developed a new cement block having higher strength, better appearance, and less self-weight. PST Limited requires a return on invested capital of 25% per annum.
Budgeted sales volume (in units)-100,000 units.
Variable production cost per unit - Rs.65
Fixed production cost per unit -Rs.55
Other annual fixed costs (overheads etc.)- Rs.2,500,000
Investment in machinery to produce the new block - Rs.1,200,000
Period over which investment in new machinery is to be written off -05 years.
Research and development costs for the new block - Rs.800,000
i) Calculate the unit price of the new cement block based on the above data.
(05 marks)
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