Question 1: (50 marks)

The coronavirus pandemic has brought online shopping to the fore. The combination of consumers convenience and the continued need for groceries, clothing, and essential goods, has made online shopping services indispensable. You have decided to adopt a proactive approach regarding online purchases and have started a new business selling personal protective equipment (PPE) online with a 2-day delivery window. Your suppliers are a combination of both local and foreign manufacturers. Your business is VAT registered. Assume that custom taxes are at 10%. Use an exchange rate of R17 to the US $.

Details of the business purchases and expenses are:

Local purchases at cost for one month:

Products	No of Units	Purchase Price per Unit
Safety Boots	25	R250
Hard Hats	20	R20
Cotton Overalls	30	R100
Disposable Earplugs	50	R10

Foreign purchases at cost for one month:

Products	No of Units	Purchase Price per Unit
Safety Boots	25	US $20
Safe Mask N95	100	US $5
Flame resistant overall	45	US $15

Overhead costs to be considered:

Expenses	Monthly Cost	Once off Cost
Website Design		R20 000
Website Maintenance	R500
Data Cost	R1 500
Salaries	R25 000
storage cost of products	R8 000
Local Transportation	R5 000
International Freight Cost	R10 000

Explain how you would calculate the costs for your products, the mark-up and selling price thereof, and to account for VAT and any other relevant taxes based on the financial information provided above. In your explanations, you would need to reflect the calculations and discuss any assumptions made in your assessment. The outcome of the above calculation needs to ensure that the business performance is viable and sustainable and not just contributing to covering the overheads of the organisation over the long term.