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?