Assume that a company of 20 employees meet 5 hours and receives $100 per hour. There are 6 directors who meet 5 hours and receive $200 per hour. Marketing expenses is $10 000. The projected cost of material is $12 000 for 100 units. A sales commission of 10% is charged. Calculate:

Total fixed cost
Variable cost
Product price
Break-even Point 20marks

Fixed Cost

Wages (staff) = $

Wages (Directors) = $

Marketing expenses = $

Total Fixed Cost = $

Variable Cost

Projected cost of material = $

Divided by number of units = $

Material cost per unit = $

Product Price

Price #1 Price #2

Net price $500 $600

Variable cost

Sales Commission 10%
Material Cost per unit
Gross profit (units)

Break-Even Point

Price #1 Price #2

Fixed cost

Divided by gross profit

Break-even point (units)

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reducing the scale of the market for a new product.