Greive is a sole trader business which only manufactures and sells a set of garden equipment which comprises a spade, a hose pipe and a trowel.

Given below are the sales revenue and profit for 2017.

Year	Sales	Profit
2017	873,620	165,820

In 2017 the business manufactured and sold 22,000 sets of garden equipment and had fixed costs of 124,000. All other costs were variable.

Required:

a.Calculate the average selling price, variable cost and contribution for a set of garden equipment for 2017.

(7 marks)

b.Calculate the average sales revenue level, both in numbers of sets of garden equipment and in money terms, at which the business broke even in 2017. (Your calculation should be rounded up to the nearest whole number.)

(4 marks)

c.Why does it make more sense for a break-even calculation to round up to the nearest whole number and not just to the nearest number?

(2 marks)

d.Calculate the number of sets of garden equipment needed to be sold to earn a profit of 200,000.

(3 marks)

e.Calculate the margin of safety for Greive for 2017.