Jane has developed a new product that she has decided to produce and market. To proceed with this project, Jane will quit her present job, which pays $3,600 a month. To proceed with this project, Jane will be renting a small building to rent for $1,600 a month that will house production facilities. One major piece of equipment that will be used to manufacture the product will be rented for $1,000 a month. Jane purchased all of the other needed tools for $7,200 which will last for two years (depreciation will be $300 per month). Jane will be using salespeople for selling the product. Sales commission is $3.00 per unit. Jane has rented a truck for delivery of the products to customer at $800 per month. Utility cost of building is expected to be $500 per month. Material costs to make the product are estimated at $10 per unit. Monthly advertising costs for the product are estimated at $1,000. Jane will be paying herself $5,000 per month as salary. Jane will be devoting 80% of her time for manufacturing the product and 20% for marketing the product. Jane believes that she could produce and sell 2500 units per month.
Compute the followings:
1. Total fixed costs per month.
2. Variable cost per unit.