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Wellness House $($Pty$)$ Ltd purchased a local olive oil manufacturing factory. The

purchase of the factory was made to optimise its operations, and it will be incorporated

as a division of Wellness House $($Pty$)$ Ltd starting $1$ March $2024.$ The factory only

manufactures one size bottle of olive oil, i$.$e$.,250$ml$.$ The factory currently supplies

$60\%$ of Wellness House $($Pty$)$ Ltd$$s olive oil bottles needed at a market price of R$230$

per bottle.

The following information has been obtained after discussions were held with the

factory management:

$$ The selling price of the $250$ ml olive oil bottle for the financial year ended $28$

February $2025$ is expected to increase by $15\%.$

$$ The variable cost per $250$ml bottle for the $2025$ year is expected to be R$144.$

$$ Fixed costs for the $2025$ year are expected to be R$34000000.$

$$ The average net assets during the $2025$ year are expected to be R$99000000.$

$$ The olive oil factory has a production capacity of $40000000$ bottles per annum,

and the demand for the $2025$ year from their external customers is expected to

be $32500000$ bottles.

$$ Factory management$$s proposed transfer price for the bottles to Wellness

House $($Pty$)$ Ltd is full cost plus $25\%.$

Wellness House $($Pty$)$ Ltd has subsequently decided that the olive oil factory must fully

satisfy the bottling division of Wellness House $($Pty$)$ Ltd$\text{'}$s internal demand before

selling externally. Wellness House $($Pty$)$ Ltd bottling division plans to bottle $4437500$

litre$$s of olive oil during the financial year ending $28$ February $2025.$

REQUIRED

Calculate the minimum price per $250$ml bottle that the olive oil factory division

will be willing to accept when selling the bottles to the bottling division of

Wellness House $($Pty$)$ Ltd$.$

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