Sovereign Footwear manufactures bespoke leather boots. The table below shows the cost and profit breakdown per pair of boots, based on a budgeted monthly production and sales volume of 150 pairs. The retail price of each pair of boots is £240.
| Cost/Revenue Component | Cost per pair |
|---|---|
| Premium Tuscan Leather | £60 |
| Direct Craftsman Piece-Rate Labor | £72 |
| Workshop Rent & Insurance | £36 |
| Machinery Depreciation (Straight-Line) | £18 |
| Direct Shipping Packaging | £8 |
| Other Variable Overheads | £10 |
| VAT (Value Added Tax) | £28 |
| Net Profit | £8 |
What is the total monthly fixed cost for Sovereign Footwear at this level of output?
£5,400
£8,100
£22,500
£18,900
