LANA won a contract to supply $40000$ headphone sets in its first year of trading to a

multinational retailer.

the following information is available for Year $1$:

$$ factory rent was $7275$ per quarter $($three months$)$

$$ material costs per headphone set $3\mathrm{.}85$

$$ direct labour costs per headphone set $5\mathrm{.}35$

$$ electricity $6500$ per year plus $3$ pence $(0\mathrm{.}03)$ per headphone set

$$ insurance for the whole business was $220$ per month

$$ other fixed costs were $2980$ per month

$$ each headphone set sells for $14\mathrm{.}99$

$$ the business operates for $50$ weeks in a year.

Required

$($a$)$ Calculate

$($i$)$ the total fixed cost for the year

$($ii$)$ contribution per unit

$($b$)$ Calculate, for Year $1,$ the break$-$even point in:

$($i$)$ sales units

$($ii$)$ sales revenue.

$($c$)$ Calculate, for Year $1,$ the:

$($i$)$ margin of safety in sales revenue

$($ii$)$ profit for the year.

The following figures are estimated for Year $2$:

$$ factory rent will rise to $7500$ per quarter $($three months$)$

$$ insurance for the whole business will rise by $10\%$

$$ other fixed costs will rise by $125$ per month

$$ material costs will rise by $2$ pence $(0\mathrm{.}02)$ per headphone set

$$ labour costs will rise by $5$ pence $(0\mathrm{.}05)$ per headphone set

$$ output and sales are to remain at $45000$ headphone sets

$$ all other costs and the selling price will remain the same.

The owner of Pine wishes to see the Year $2$ estimated figures.

$($d$)$ Calculate the following:

$($i$)$ the total fixed costs

$($ii$)$ total costs

$($iii$)$ sales revenue

$($iv$)$ break$-$even units

$($v$)$ margin of safety, in sales units

$($vi$)$ profit for the year.