PART B (9 marks)

Nina Spade makes custom made leather handbags which she sells at local markets. Each bag sells for $500 and the variable costs to make each bag are 40% of the selling price. In 2020 Ninas total fixed costs were $60,000 and her target profit was $31,500.

Required:

Calculate the following showing all workings.

a) Contribution margin ratio (3 marks).

b) Annual break-even point in sales dollars (2 marks).

c) The sales in units for Nina to earn the target profit for the year 2020. (3 marks). d) Explain to Nina how she may interpret your calculation of the Contribution Margin Ratio calculated in part a) above. (1 mark)

***** I HAVE 35 MIN LEFT SOMEONE PLEASE HELP