Expresso (Pty) Ltd sells hot and iced coffee beverages, and small snacks. The following is the previous months statement of profit or loss.

Revenue		$7,500
Cost of beverages and snacks	$2,500
Cost of napkins, straws etc.	700
Cost to rent cart	800
Employee wages	2,000	6,000
Pre-tax profit		1,500
Tax		525
After-tax profit		$ 975

Required

1. What is the total fixed cost for the month under review?

2. What is Expressos tax rate for the month under review?

3. Calculate the amount of sales needed to reach a targeted after-tax profit of $1,500?

4. What was Expressos degree of operating leverage for the month under review?

5. What was Expressos margin of safety in revenue for the month under review?

6. What was Expressos margin of safety percentage?

7. Suppose this months actual revenues are $8,000 and pre-tax profit is $2,000. What will the total cost be?