1. Ryans Music provides individual music lessons in the home of clients. The following data are provided with respect to the last 12 months of activity ending 30 June 2015.

Lesson selling price $45 Lesson labour cost 30 Annual fixed costs 18,000 Lesson sheet music costs 3Average selling price per unit $10.00 Average variable cost per unit: Cost per unit 5.00 Selling costs 1.40 Annual fixed costs Selling costs 240,000 Administration 380,000 After-tax profit target 126,000 Tax rate 30%Selling price per unit $40.00 Variable manufacturing cost per unit 14.00 Annual fixed manufacturing costs 300,000 Variable marketing, distribution and adm costs 10.00 Annual fixed non-manufacturing costs 180,000 Annual volume 38,000 unitsProduct A Product B Expected sales volume in units 35,000 15,000 Selling price per unit $40 $26 Variable cost per unit $24 $14 Annual fixed costs $621,600