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

The objective of the question is to calculate the unit price of the new cement block developed by…

Answered: b) PST Limited is a cement block…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Kk.207.
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