BIL Motor Component Co decided to launch a new product, component TDX489, and has provided that:

Standard cost per box :

- Variable cost = 6.20

- Fixed cost = 1.60

Market research forecast of demand:

Selling price- $13 =Demand- 5 000

Selling price - $12 =Demand- 6000

Selling price - $11 =Demand - 7200

Selling price- $10 =Demand- 11 200

Selling price- $9 = Demand- 13 400

The company only has enough production capacity to make 7 000 boxes. However, it would be possible to purchase product TDX489 from a sub-contractor at $7.75 per box for orders up to 5 000 boxes, and $7 per box if the orders exceed 5 000 boxes.

Determine the selling price at which profit should be maximised. (18 marks)