Tool Boxes Ltd produces three models of toolbox: a basic box-'Tools to go', a large divider box -'The Workman' and a deluxe divider box -'The specialist'. They are sold in DIY stores and online. The Departmental Direct Fixed Costs are budgeted to be $2,000,000.
The original budget has been prepared assuming that productions and sales will be at the department's full labour capacity. 50,000 toolboxes will be produced in the proportions of Tools to go 20%, The Workman 50% anf the Specialist 30%.
However, the latest market research considers that sales of only 45,000 Toolboxes can be achieved, and in the proportions of 30%, 55% and 15%.
a) Using the information relating to the original budget for 2022/23 calculate the net income that the company would make. Calculate the breakeven point for the department showing the total number of Toolboxes needing to be sold and the numbers of each type of Toolbox.
b) Calculate the corresponding information as in part (a) for the projections of sales of 45,000 Toolboxes.