Q7. a) Explain the difference between full-absorption costing and direct costing? How does absorption costing help an entrepreneur make better decision? (4 marks) b) "A start-up entrepreneurship does not need to develop a business plan when launching a new enterprise. All he/she need is a business idea and money to start operating." Evaluate this statement supporting your answer with facts (4 marks) c) Contribution statement for komfwe dry cleaning Ltd Product A(ZMW) Product B(ZMW) Unit budgeted 1000 1000 Sales 1000 500 Variable costs 600 300 Contribution 400 200 Fixed costs 200 200 Profit 100 Calculate Break-even point for each product Contribution ratio for each product ii) iii) Can you close product B and why? Explain (2 marks each= 6 marks) d) What options does an entrepreneur have if he or she becomes unhappy with the growth of the company? (6 marks) Total marks 20 Q7. a) Explain the difference between full-absorption costing and direct costing? How does absorption costing help an entrepreneur make better decision? (4 marks) b) "A start-up entrepreneurship does not need to develop a business plan when launching a new enterprise. All he/she need is a business idea and money to start operating." Evaluate this statement supporting your answer with facts (4 marks) c) Contribution statement for komfwe dry cleaning Ltd Product A(ZMW) Product B(ZMW) Unit budgeted 1000 1000 Sales 1000 500 Variable costs 600 300 Contribution 400 200 Fixed costs 200 200 Profit 100 Calculate Break-even point for each product Contribution ratio for each product ii) iii) Can you close product B and why? Explain (2 marks each= 6 marks) d) What options does an entrepreneur have if he or she becomes unhappy with the growth of the company? (6 marks) Total marks 20