Question#4 The Zeta Smart Phone Company has the maximum capacity to manufacture 800 smart phones annually with an extra long battery life feature. If all units were to be sold the company would earn $480,000. The cost breakdowns relating to the output level of 800 units on an annual basis are given in Table Q5. An ancillary items pack is sold for an additional $20 with every smart phone sold. The cost of producing the ancillary items pack is negligible. The Zeta company is required to pay a 6% royalty fee on all revenues back to it's parent company. Calculate the following for an 800 unit output level of production. Variable and fixed cost table for the Zeta Smart Phone Company Manufacturing Costs (800 Units) Selling and admin costs (800 Units) $62,000 $16,000 $14,000 riable Fixed portion Direct labour Direct materials (components) Direct materials (circuit boards + casing) Variable portion Fixed portion $10,000 $32,000 $18,000 $66,000 Table Q5 a) Explain what is meant by the term "Contribution Margin" and how it relates to the break-even point and fixed costs. b) The manufacturing cost per unit c)Total variable cost per unit d) The number of units to be produced and sold to break even e) If the rent increased by $300 per month, calculate the new break-even point f) How many computers are required to be produced and sold to absorb the increased rent of part (e) above and make a pre tax operating income of $300,000 for the year? Comment on whether the company can achieve this target