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Ria King is the owner and operator of King's Desks, a small business. Ria has identified the following costs relating to the production of the

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Ria King is the owner and operator of King's Desks, a small business. Ria has identified the following costs relating to the production of the desks: Rent of premises $700 per month Electricity $350 per month Glue $50 makes 5 desks Administration Expenses $250 per month Materials $45 per desk Varnish $5 per desk Each desk sells for $75 and Ria wants to earn $1,500 profit per month. Required: [Note: amounts should be rounded to whole dollars) (a) Calculate the variable cost of one desk. (b) Calculate the fixed costs per month. (c) Calculate the units of desks Ria will need to sell per month in order to break-even. (d) Referring to your answer to part (c), calculate the sales revenue the firm will earn when break- even is achieved (e) If Ria were to increase her desired profit by 10%, how many units of desks will she need to sell per month in order to earn her new desired profit? ( Calculate the breakeven in units of desks if variable costs are to increase by 10 per cent. Assume no changes in the fixed costs. (8) Evaluate the usefulness of breakeven analysis for Ria's business

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