Reference no: EM132822185
Question - John is the sole owner of 'Dude Mug Shop'. The business is registered for GST. He has provided you with the following information in relation to the 2021 FY budget: Estimated sales units for the year: 10,000 units
Selling price per unit: $11.00 (GST Inclusive)
Based on the above sales units and dollars, the following expenses are expected to be incurred in 2021 FY:
Rent of Premises (GST Inclusive) $44,040.00
Salaries - Sales Staff $68,000.00
Salaries - Office Staff $80,400.00
Sales Commission Expense - @2.5% of sales revenue $2,500.00
Unit cost - variable (GST Inclusive) $44,000.00
Interest on Loan (Loan $30,000 @ 8% per annum) $2,400.00
Office supplies expense $2,760.00
Depreciation - Shop Fittings $6,480.00
Depreciation - Computer Equipment $4,200.00
Required -
(a) Calculate the contribution margin per unit. Show workings.
(b) Calculate the total annual fixed costs. Show workings.
(c) Calculate the breakeven point in units. Show workings.