Quality Data manufactures two product, CDs and DVD, both on the same assembly lines and packed 10 disk per pack. The predicted sales are 400,000 packs of CDs and 500,000 packs of DVDs. The predicted costs for the year 2012 are follows:
Variable Costs Fixed Costs
Materials $200,000 $500,000
Other 250,000 800,000

Each product uses 50 percent of the material costs. Based on manufacturing time, 40 percent of the other costs are assigned to the CDs, and 60 percent of the other costs are assigned to the DVDs. The management of Quality Data desired an annual profit of $150,000.

Required:
a. What price should Quality Data charge for each disk pack if management believes the DVDs sell for 20 percent more than the CDs?
b. What is the total profit per product using the selling prices determined in part a?

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