Tennis Tonic (Pty) Ltd manufactures and sells Tennis racquets. An extract from the companys marginal income statement for the month of June 2023 as well as comparative numbers is provided below:

June-23

June-22

Production units

Units

3 800

4 400

Sales

Rands

570 000

660 000

Direct materials

Rands

228 000

264 000

Direct labour

Rands

142 500

165 000

Premises rental

Rands

28 500

28 500

Other fixed production overheads

Rands

34 200

34 200

Depreciation

Rands

5 800

5 800

Manufacturing equipment rental

Rands

6 410

6 950

Additional information:

The manufacturing equipment is leased at a flat rate per month plus an additional cost based on the number of units produced per year.

Depreciation relates to equipment owned by Tennis Tonic, which is depreciated at 10% per annum on the straight-line method.

REQUIRED

a) Indicate whether the cost involved would be variable, fixed or semi variable (mixed) (3)

Variable

Fixed

Semi-variable

Direct Materials

Direct labour

Premises rental

Other fixed production overheads

Depreciation

Manufacturing equipment rental

b) Calculate the total variable cost per unit in the month of June 2023. (6)

c) Calculate contribution per unit. (2)

d) Calculate break-even point in units. (4)