John is the sole owner of 'Dude Mug Shop'. The business is registered for GST.

He has provided you with the following information in relation to the 2021 FY budget:

Estimated sales units for the year: 10,000 units

Selling price per unit: $11.00 (GST Inclusive)



Based on the above sales units and dollars, the following expenses are expected to be incurred in 2021 FY:



Rent of Premises (GST Inclusive)

 $  44,040.00

Salaries - Sales Staff

 $  68,000.00

Salaries - Office Staff

 $  80,400.00

Sales Commission Expense - @2.5% of sales revenue  

 $    2,500.00

Unit cost - variable (GST Inclusive)

 $  44,000.00

Interest on Loan (Loan $30,000 @ 8% per annum)

 $    2,400.00

Office supplies expense

 $    2,760.00

Depreciation - Shop Fittings

 $    6,480.00

Depreciation - Computer Equipment

 $    4,200.00

 

Required:

(a)

Calculate the contribution margin per unit. Show workings. [2 marks]



(b)

Calculate the total annual fixed costs. Show workings. [2 marks]



(c)

Calculate the breakeven point in units. Show workings. [2 marks]