$12.$ Retained Earnings represent a very important source of finance for companies.

Which of the following statements is true about Retained Earnings?

A$)$ Retained earnings represent a free source of funds.

B$)$ No Issue costs are incurred and the amount raised is certain.

C$)$ Retained Earnings represents a very good external source of finance.

D$)$ Retained Earnings are a form of short$-$term finance.

$13.$ Lorient plc has three products all of which require the same production facilities.

Financial data on the three products are as follows:

PRODUCT X Y Z

$$ per unit $$ per unit $$ per unit

Labour: skilled $101520$

Labour: unskilled $363$

Materials $91215$

Variable Overheads $81216$

Share of Fixed Overheads $101520$

All three of the products use just one raw material, which is the same material for all three products. This material costs $12$ a kilo and is scarce.

The company has adequate production capacity to satisfy the market demand for all three the products.

All labour is a variable cost.

Product X is sold in a market where the selling price per unit is fixed at $60.$

What is the price at which the business would need to sell product Z such that it would be equally profitable to produce and sell any one of the three products?

A$)104$

B$)96$

C$)124$

D$)114$