REQUIRED:

(a)

Calculate the unit variable cost of Apia.

(3 marks)

(b)

Calculate the unit contribution margin (in $) of Apia.

(3 marks)

(c)

Calculate the break-even sales volume (in units and in $).

(4 marks)

(d)

Assuming that material prices increased by 10%, wages rates increased by 12.5% and fixed overhead increased by $8,000, calculate the new selling price needed to achieve a profit of $144,000 if the sales volume remain unchanged.

(4 marks)

Reckon Enterprises makes and sells a single product, Apia. The trading results for its first year of business are expected to be: Sales (@$7 per unit)