Zigismond Products Limited Applies Cost-Plus Pricing to Its Range of Products.A

Zigismond Products Limited applies cost-plus pricing to its range of products.A new product, the ZP 131, is due to start production and the directors have met to determine a selling price for it. Variable costs of production total £16.50.Fixed production overheads in respect of the production capacity devoted to the new product are estimated at £366 000 for the coming financial year.Overhead is absorbed using direct labour hours.Each ZP 131 requires 1.5 direct labour hours.A total of 96 000 direct labour hours will be available for the production of the ZP 131.
The company requires a profit mark-up of 25.5% on total cost.What is the cost-plus selling price for each ZP 131 unit (to the nearest penny) ?

A) £27 89
B) £20.71
C) £25.49
D) £26.43