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Calculate LN's budgeted annual total fixed costs to be used in the calculation of the break-even point.

Economics

ScanSolve AI Answer

Answer

R 77 400\text{R } 77\,400

Step-by-step solution

3 steps

  1. Identify all monthly fixed costs from the table.

    • Monthly shop rental: R 3 600
    • Monthly utilities: R 1 200
    • Monthly insurance: R 900
    • Monthly Website hosting: R 750

  2. Calculate the total monthly fixed costs.

    Total Monthly Fixed Costs=R 3 600+R 1 200+R 900+R 750\text{Total Monthly Fixed Costs} = \text{R } 3\,600 + \text{R } 1\,200 + \text{R } 900 + \text{R } 750 Total Monthly Fixed Costs=R 6 450\text{Total Monthly Fixed Costs} = \text{R } 6\,450

  3. Convert the total monthly fixed costs to annual fixed costs by multiplying by 12 months.

    Annual Total Fixed Costs=Total Monthly Fixed Costs×12\text{Annual Total Fixed Costs} = \text{Total Monthly Fixed Costs} \times 12 Annual Total Fixed Costs=R 6 450×12\text{Annual Total Fixed Costs} = \text{R } 6\,450 \times 12 Annual Total Fixed Costs=R 77 400\text{Annual Total Fixed Costs} = \text{R } 77\,400

    The budgeted annual total fixed costs are:

    R 77 400\text{R } 77\,400
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