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a) Chiyeyeye Enterprises Ltd sells equestrian boots and has three brands: Riding boots, work boots and casual wear. Looking ahead to the financial year
a) Chiyeyeye Enterprises Ltd sells equestrian boots and has three brands: Riding boots, work boots and casual wear. Looking ahead to the financial year ending 31st may, 2022, the directors of Chiyeyeye Enterprises ltd are faced with a budget loss of ZMW 10 000. This is based on the following data: Budgeted number of boots Sales price per unit Variable cost per unit Fixed cost 10 000 ZMW10 ZMW 6 ZMW 6000 i) ii) iii) iv) v) Calculate the breakeven point for Chiyeyeye Enterprise ltd (4 marks) The number of boots to be sold to make a profit of ZMW 20 000 What happens to the profit if the overheads increase to ZMW 8000? (4 marks) Calculate the profit if the selling price increase to ZMW 12 per boot(4 marks) Calculate the contribution margins for Chiyeyeye Enterprise ltd for each product? Based on your calculated contributions margin for each product line, what is the best decision by Chiyeyeye management on each product line? (13 marks)
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