Question 2 - This question has 3 parts (6 marks)

[2 + 2 + 2]= 6 marks

John is the sole owner of'Dude Mug Shop'.The business is registered for GST.

He hasprovided 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.[2 marks]

(b)

Calculate the total annual fixed costs.Show workings.[2 marks]

(c)

Calculate the breakeven point in units.Show workings.[2 marks]