Given the following costs, sales and inventory for a new start-up:

• Operating expenses = $60000 (from the projected income statement)
• Less depreciation (2.5% of annual sales*)
• Annual sales: 30000
• Annual inventory turnover ratio* = 8 times per year

a) What is the cash requirement?

2- Exotik appliances estimates its fixed costs for producing its line of small appliances at $390,000. The variable costs (including materials, direct labour, and factory overhead) amount to $12.10 per unit, and the selling price per unit is $17.50. Calculate:

a)Break-even volume (units)

b)Break-even sales

c) What level of units and sales must Exotik appliances achieve to generate $60,000 profit?