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2 (25 MARKS) PART A (6 MARKS) Your friend, Jay, owns Kiya and Motsie Ltd, a business manufacturing and selling water-proof work short. These shorts
2 (25 MARKS) PART A (6 MARKS) Your friend, Jay, owns Kiya and Motsie Ltd, a business manufacturing and selling water-proof work short. These shorts come only in black colour. On 28 April 2024, the business has 200 unsold water-proof work shorts. A new legislation has been introduced and from 1 May 2024, all work shorts must be in yellow, fluorescent colour and have reflective visibility tape. Knowing that within two days no black water-proof work shorts can be sold, Jay is considering options of selling as many as the 200 unsold shorts before 1 May 2024, and one possibility occurred to him. If Jay drives to a local market, he is likely to be able to sell the shorts. The local market is 15 kilometres round trip, would cost Jay $0.75 per kilometre, and take one hour. Jay would be happy to drive to the local market to sell the 200 black water-proof work shorts if he is able to make a profit of $5000. Jay has limited accounting knowledge and approached you to help him work out how much he needs to charge for each of the 200 black water-proof work short at the local market. REQUIRED: Prepare an analysis showing clearly to Jay how much he needs to charge for each short he sells at the local market to be able to earn a profit of $5 000. (6 marks)
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