Digi Tools Pty Ltd plans to launch a new type of gadget. The company provided the following information:

Selling price	$540
Direct materials	$130
Direct labour	$190
Variable overhead	$60
Fixed Costs	$3,200,000
Estimated sales	50,000 units
Production capacity	65,000 units

Required (show your calculations):

Calculate the breakeven point in units and sales amount.

Calculate the expected profit from the estimated sales.

If the company required a profit of $7,680,000 what level of units would be required?

should the company adopt the strategy for part iii above. Why or why not?

A big chain electronic retail, GB-Hi Five Ltd, has offered to purchase 5,000 units of the gadget from Digi Tools for $460. To meet the packaging and delivery requirements of GB-Hi Five, the variable cost of the gadget would increase by $30 per unit. Fixed costs would not change. Should Digi Tools accept the offer from GB-Hi Five? Justify your answer.

Digi Tools new CEO is a scientist with limited accounting knowledge. She wants to know what the difference/s between variable costs and fixed costs is/are. Briefly explain to her the difference including an example for each type of costs for a company like Digi Tools.