Golden Mouse Trap is a startup manufacturer of mouse traps founded by Sybil and the company has just completed its first year of operation. The product has been enjoying decent success in its direct 32C Shopify online sales effort over its first year of operation and has attained an annual unit sale of 140,000 units at a unit selling price of $9.99. Although the company's cash flow in the first year is, indeed, encouraging, Sybil cannot help but wonder if she has made a profit in the first year. After all, her passion has always been in marketing/sales as opposed to finance, After having hired a marketing research firms service to gain more insights into the company's target market and its competitors' price strategies, the owner is toying with the idea of significantly increasing the product's price point to $1199 as research results suggested its product's price point to be much lower than those of its competitors. Nevertheless, the research firm has also provided a category benchmark on elasticity which stands at -l.4. There are other concerns that Sybil is also facing: a. The lease for the facility in which the company is currently operating has just expired at the end of the first year, For the upcoming second year, Golden Mouse Trap has already signed a new lease that is 6% higher in rent and a one-time moving cost of $l5,000 is to be spent inevitably, b. All salaries will have an annual increment of 3% to offset against inflation (fair wage practice). c. Should annual unit sales fall below 100,000 units, the supplier's price for raw material will be increased by 5% because the order volume for raw material corresponding to a lesser amount than the stated unit sales volume will fall short of the minimum order quantity needed to qualify for the first year's volume-discounted price point. Furthermore, should the above take place, the company will have also to pay an extra $2,000/year administrative fee to the supplier which was waived for the first year. Information Costs to the company for the first year $ Raw material (per unit) $2.00/unit Packaging (per unit) $0.50/unit Production Labour (per unit) $l.OO/unit Shipping (on average per unit) $2.50/unit Shopify Transaction Fee (per unit) 3.00% of Sales Credit Card Processing Fee (per unit) 230% of Sales Credit Card Processing Fee (per unit) 230% of Sales Rent as per current lease (per month) $5,500/month Advertising (per year) $35,000/year Non-production Salaries (per month) $28,000/month Other General Expenses (per month) $4,000/month Questions (marked out of [26 marks) - Be cautioned of the fact that all working steps and itemized breakdowns where applicable are to be shown clearly without the substantiation of which a correct answer may still score minimal mark, if any_. The presentation of your answers is expected to be organized, concise and informative. Work with 2 decimal places when you are performing calculations. Present your answers ($; units; percentages etc., where applicable) in 2 decimal places. i. (a) What is the total fixed cost for the first year? (0.5 mark) (b) Substantiate with itemized elements. (2 marks) 2. (a) What is the total variable cost for the first year? (0.5 mark) (b) Substantiate with itemized elements. (3 marks) 3. (a) Is Golden Mouse Trap making a profit or is it incurring a deficit in the first year? (0.5 mark) (b) in either case, what is the exact amount in 2 decimal places? (1.5 marks) 4. What is the estimated quantity to be sold at the new price in the second year? (a) List formula to be used (0.5 mark) (b) Working steps (2.5 marks) (c) Answer (1 mark) 5. (a) What is the total fixed cost for the second year? (0.5 mark) (b) Substantiate with itemized elements, (2 marks) 6. (a) What is the total variable cost for the second year? (0.5 mark) (b) Substantiate with itemized elements, (3 marks) 6. (a) What is the total variable cost for the second year? (0.5 mark) (b) Substantiate with itemized elements. (3 marks) 7. (a) Is Golden Mouse Trap making a profit or is it incurring a deficit in the second year? (0.5 mark) (b) In either case, what is the exact amount in 2 decimal places? (l.5 marks) 8. What difference would a category benchmark on elasticity of i.45 make to the profit/deficit situation in the second year? Substantiate your answer in the same manner as you had for the earlier questions (4 marks) 9. What lessons can you draw from the above. (2 marks)