New Moon Limited sells one product for which data is given below:

Selling price $15 per unit and Variable cost $9 per unit

Fixed cost per annum $840,000

(i) Calculate the breakeven point in units per annum.

(ii) Calculate the number of units that must be sold if Sun Limited wishes to earn a minimum profit of $120,000 for the year.

(iii) Explain the effects [ without calculations] of increasing the selling price on the breakeven point assuming no other changes. [4 marks]

Listed below are the two types of cost behaviour, you are required to define each type of cost behaviours.

(i) Fixed Costs

(ii) Variable Costs

New MoonLimited has the following total costs for the manufacture of Product Super over a period of 4 months. Using the high-low method, answer the following questions.

Month No. of Units Total Costs ($)

January 6,000 44,000

February 3,000 32,020

March 2,000 28,000

Apri l 4,100 36,400

(i) Calculate the variable cost per unit produced.

(ii)Calculate the fixed cost portion of the total cost

(iii) If the company produces 7,000 units in May, what will be the total cost?

[Show all the formulae used and workings to support your final answers]