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Choudray Engineering Ltd Makes Product Sold 53 Per Unit Following Costs Per Unit Variable Q17774478

A. Choudray (Engineering) Ltd makes a product that is sold for£53 per unit and has the following costs per unit.

£

Variable material cost
10

Variable labour cost
24

Share of fixed costs
12

46

The labour cost includes three hours’ charge for assemblers whoare paid £6 per hour. The business is considering sub-contractingthe assembly work as demand for the product outstrips the abilityof the business to assemble the parts that are produced to make theproduct.
What is the maximum price that the business should be preparedto pay to have one unit of the product assembled?
The price is £. (round to full £)
 
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