Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Dan Electro Dan Bowen is a sole trader who sells digital cameras directly to consumers. He owns an online business and all sales are processed
Dan Electro Dan Bowen is a sole trader who sells digital cameras directly to consumers. He owns an online business and all sales are processed electronically under the business name Dan Electro. Financial information for 2012 (all figures in USS) Fixed costs per year Rent 20 000 Marketing 4000 Administration 5000 Interest payments 1000 Variable costs per camera Camera Transportation Direct labour 135 45 20 Price per camera 250 Dan forecasts selling 700 cameras in 2012. (a) Define the term variable costs. [2 marks] (b) (i) Construct a fully labelled break-even chart for Dan Electro for 2012. Calculate and indicate the break-even point and the margin of safety and calculate the forecasted profit from the sale of 700 cameras (show all your working). [6 marks] (ii) Calculate the number of cameras Dan Electro must sell in order to double the forecasted profit (show all your working). [2 marks]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started