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2.(42 marks) Rhoda runs a small home-based business to make and sell masks. The average material cost for one mask is $1.20, her labour cost
| 2.(42 marks) | Rhoda runs a small home-based business to make and sell masks. The average material cost for one mask is $1.20, her labour cost is $1.00 per unit sold, and sells it to her customers on average of $3.50 per unit. She spends $150.00 per month for advertising. | |||
| a. (6 marks) What is the unit variable cost? | ||||
| b. (6 marks) What is the unit contribution margin? | ||||
| c. (6 marks) What is the contribution rate? | ||||
| d. (6 marks) What is her net income or loss if 500 units are sold? | ||||
| e. (6 marks) What is the break-even point in units? | ||||
| f. (6 marks) What is the break-even point in dollars? | ||||
| g. (6 marks) What is the new unit break-even point if she increases her advertising costs by 30% per month? | ||||
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