Question 3: Buckley Enterprises operates a single-product entity. Data relating to the product for 2020 were as follows:

Annual Volume	32,000 Units
Selling price per unit	$50
Variable manufacturing cost per unit	$18
Annual fixed manufacturing costs	$320,000
Variable marketing and distribution costs per unit	$12
Annual fixed non-manufacturing costs	$160,000

PART A

(i) Calculate total fixed costs and total variable costs per unit.

(ii) Calculate Profit Volume Ratio and break-even units for 2020.

(iii) Changes in marketing strategy are planned for 2021. This would increase variable marketing and distribution costs by $15 per unit and reduce fixed non-manufacturing costs by $100,000 per year. Calculate and interpret the units that would need to be sold in 2021 to achieve the same profit as in 2020.

PART B

Nikon Furniture Ltd, an office furniture retailer and wholesaler, carries a particular brand of office chair. During the year ended 30 June, the following purchases occurred:

August 50 chairs@40

October 60 chairs @55

December 55 chairs@ 60

March 60 chairs @50

As at 1 July, Nikon furniture Ltd had 18 chairs in inventory, costed $44 per unit. As at 30 June an inventory count revealed 21 chairs in inventory. Compare the value of the office chairs on hand as at 30 June to be included in the inventory balance on the balance sheet under the FIFO inventory method.

Required: Calculate value of inventory as at 31 March 2015 under FIFO method of inventory valuation.