Calista London, after spending 20 years working for a large engineering firm, has decided to start her own business. She has designed a product to remove jar lids with minimal physical effort. London believes this product will sell 1 million units per year. London has protected her design with appropriate patents, has acquired production space and required machinery, and is now training her newly hired employees to manufacture the product.
London has been your friend for many years and has asked your advice about what type of product cost and valuation system she should use. Based on the limited information given here, what recommendation would you make to London? Why?