QUESTION 2 [Total 15 marks]

Consider a company which currently sells 1,000 units of a product at $10 per unit. The variable cost per unit is $5 and the fixed costs are $2,000.

(a) Calculate the sales revenue. (2 marks)

(b) Calculate the variable costs. (2 marks)

(c) Calculate the total costs. (2 marks)

(d) Calculate the operating profit. (3 marks)

(e) What quantity of the product would the company need to sell to break-even? (4 marks)

(f) What is the break-even sales revenue? (2 marks)