Q$2$

a$)$ Chiyeyeye full cost statements appears as follows:

Indirect expenses

Chiseche budgets to make and sell $100$ pieces of furniture's during the financial year. If the selling

price per furniture is $ZMW600$ and variable cost per unit would be $ZMW400.$

Looking ahead to the financial year ending ${31}^{+-}$march $2018,$ the directors of chiyeyeye linited

are faced with a budgeted loss of $ZMW10,000$

Budgeted units $100$

Selling price per uit $,$ MMW$600$

Variables costs per umit $,MMW400$

Fixed cost $,$ ZMW $21000$

The directors would like to aim for a profit of $ZMW20000.$ Various proposals have been put

forward, none of which require a change in the budgeted levels of fixed costs:

a$)$ Rechuce the selling price per umit by $10$ percent

b$)$ Increase the selling price of each umit by $10$ percent