a) Identify an example ofi) a sunk cost,ii) an opportunity cost, andiii) a semi-variable cost in the above.b) Calculate Simon'si) break-even pointii) margin of safety (as a percentage) given anticipated annual sales of 4,800 units and c) his anticipated annual profit on sales of 4,800 units per annum Part 3Simon has invented a new component for the wave turbine industry, and isconsidering starting to trade from and including 1 June 2022.He has given you the following information.• Sales are forecast at 400 units per month.• Each unit will sell for £100 each.• Variable costs of manufacture are £60 each.• He has had the idea for the new component for several years, and inMay 2022 he paid a firm of consultants £2,000 for a report on his newbusiness.• He will resign from his existing job in order to run his business. Hecurrently earns £34,000 per annum.• Fixed overheads of £2,000 per month are estimated, and includedepreciation of £500 per month. Fixed overhead payments arepayable in the month when they are incurred.A sales person will be employed at a monthly salary of £1,500 plus acommission of £5 for every item sold. The sales person's salary andcommission is not included in any of the above.Requireda) Identify an example of i) a sunk cost, ii) an opportunity cost, and iii) asemi-variable cost in the above.b) Calculate Simon's i) break-even point ii) margin of safety (as a percentage)given anticipated annual sales of 4,800 units and c) his anticipated annualprofit on sales of 4,800 units per annum.

Break- Even Point - The point at which total cost and total income are equal, or "even," is known as…

Answered: portunity cost, and iii) a…

portunity cost, and iii) a semi-variable cost in the above. b) Calculate Simon's i) break-even point ii) margin of safety (as a perce

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8EB: Shonda & Shonda is a company that does land surveys and engineering consulting. They have an...

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