Cottage Industries Ltd produces baskets. The fixed cost of operating the workshop for a month totals
500$. Each basket requires material that cost 2$, and it takes 1 hour to make each basket.
Cottage Industries pays the basket maker 10$ per hour. The basket makers are all on contracts such that
if they do not work for any reason, they are not paid. The baskets are sold to a wholesaler for 14$ each.
a) Calculate the BEP of producing baskets for Cottage Industries.
b) What will be the revenues of Cottage industries at BEP?
c) What are the total expenses of cottage Industries at BEP?
d) Prepare a schedule of costs and revenues for Cottage Industries.