Kauri Pine Tables is a retail store which makes and sells recycled kauri pine tables. Details for Kauri Pine Tables are provided below:- Expected Sales Per Annum Average Selling Price Per Table Variable Cost Per Table Fixed Costs Per Annum Tax Rate 2.700 tables $1,300 $820 $1,240,000 30% Required 1] How many tables must be sold to "break even"? Show all calculations. Total fixed costs = $1,240,000 Contribution Margin Per Unit -table (CMPU) = Selling price per table- Variable cost per table = $1,300-$820 = $480 Break even in unit (table) = Total fixed costs/ CMPU = $1,240,000/$480 = 2,583 Tables Kauri Pine need to sale 2,583 tables to cover total costs. [2] Calculate the Net Profit After Tax based on Kauri Tables expected sales per annum. Contribution margin income statement / Calculation of net profit after tax ($) Total revenue (2700 * $1300) Less: Total variable costs ( 2700*$820) Total contribution margin Less: Total fixed costs Profit before tax Less: tax (30%) Net profit after tax 3,510,000 (2,214,000) 1,296,000 (1,240,000) 56,000 (16,800) 39,200 [3] The management of Kauri Tables would like to earn a Net Profit After Tax of $85,000. How many tables will need to be sold to achieve this target? Show calculations.

Calculation of before profit after tax of $85,000 = (85000/70) *100 = $121,429 To achieve $121,429 = (Total fixed costs + Target before tax profit )/ CMPU = (1,240,000 + 121,429/$480 = 2,836 Tables If Kauri Pine wants to achieve $121,429 target profit, 2,836 tables need to be sold. [4' Is this target achievable? Explain your answer with reference to relevant calculations. The company's BEP is 2,583 tables, to achieve $85000 net profit, the company need to sale 2,836 tables which is 253 more tables then the BEP. Based on these information, it is expected that the target profit is achievable. [5] Provide 2 alternative strategies Kauri Pine Tables could use to increase its profitability. Identify 1 advantage and 1 disadvantage associated with each strategy First strategy: Reducing the cost of the product which means finding the cheaper raw materials and labour from the alternative suppliers. However, the company need to maintain the quality of the product.