Product X is produced in two production cost centres. Budgeted data for product X are as follows: & Cost centre A & Cost centre B Direct material cost per unit & £ 60.00 & £ 30.30 Direct labour hours per unit & 3 & 1 Direct labour rate per hour & £ 20.00 & £ 15.20 Production overhead absorption rate per direct labour hour & £ 12.24 & £ 14.94 General overheads are absorbed into product costs at a rate of 10 % of total production cost. Requirement If a 20 % return on sales is required from product X , its selling price per unit should be £ 298.60 £ 282.31 £ 271.45 £ 286.66

## Step 1: Calculate Total Production Cost per Unit### For each cost centre, calculate the total production cost per unit by adding direct material cost, direct labour cost, and production overheads.- **Cost Centre A:** - Direct Material Cost = £60.00 - Direct Labour Cost = Direct Labour Hours × Direct Labour Rate = - Production Overheads = Direct Labour Hours × Overhead Absorption Rate = - Total Cost for Cost Centre A = £60.00 + £60.00 + £36.72 = £156.72- **Cost Centre B:** - Direct Material Cost = £30.30 - Direct Labour Cost = Direct Labour Hours × Direct Labour Rate = - Production Overheads = Direct Labour Hours × Overhead Absorption Rate = - Total Cost for Cost Centre B = £30.30 + £15.20 + £14.94 = £60.44## Step 2: Calculate Combined Total Production Cost per Unit### Add the total costs from both cost centres to get the combined total production cost per unit.- Combined Total Production Cost = £156.72 (Cost Centre A) + £60.44 (Cost Centre B) = £217.16## Step 3: Calculate General Overheads### General overheads are absorbed at a rate of of the total production cost.- General Overheads = ## Step 4: Calculate Total Cost Including General Overheads### Add general overheads to the combined total production cost.- Total Cost Including General Overheads = £217.16 + £21.716 = £238.876## Step 5: Determine Selling Price for Required Return on Sales### To achieve a return on sales, the selling price should be calculated as follows:- Let be the selling price. Then, - Solving for , we have: ## Step 6: Choose the Closest Option### Compare the calculated selling price with the given options to find the closest match.