Compute what should the price of the diagnostic kit be

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Question 1: During 1997, Harar Laboratory supplied hospitals with a comprehensive diagnostic kit for Br 120, At a volume of 80,000 kits, Harar had fixed costs of Br 1,000,000 and as profit before income taxes of Br 200,000. Due to an adverse legal decision, Harar's 1998 liability insurance increased by Br 1,200,000 over 1997, Assuming the volume and other costs are unchanged, what should the 1998 price of the diagnostic kit be if Harar is to make the same Br 200,000 profit before income taxes?

Reference no: EM132562431

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