droppy Sdn Bhd is a company which has been selling water bottle in perth for more than 5 years. The owner, Madam Izzian plans to achieve a minimum profit of RM 2,000 in the month of January 2018. According to her, this amount is reasonable since the school will start in January and many parents would buy water bottle for their kids. Fixed costs which comprise mainly rental and salary are RM3,000 monthly. The cost of water bottles are expected to increase by 10% from its previous cost of RM6.90 per bottle and currently the selling price of each water bottle is RMI 4.90. Required: a) Compute the contribution to sales ratio. b) Calculate the break-even point in units and sales. c) Calculate the number of water bottle that Madam Izzian needs to sell in order to achieve a profit of RM150,000.

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droppy Sdn Bhd is a company which has been selling water bottle in perth for more than 5
years. The owner, Madam Izzian plans to achieve a minimum profit of RM 2,000 in the month
of January 2018. According to her, this amount is reasonable since the school will start in
January and many parents would buy water bottle for their kids. Fixed costs which comprise
mainly rental and salary are RM3,000 monthly. The cost of water bottles are expected to
increase by 10% from its previous cost of RM6.90 per bottle and currently the selling price of
each water bottle is RMI 4.90.
Required:
a) Compute the contribution to sales ratio.
b) Calculate the break-even point in units and sales.
c) Calculate the number of water bottle that Madam Izzian needs to sell in order to achieve
a profit of RM150,000.

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droppy Sdn Bhd is a company which has been selling water bottle in perth for more than 5 years. The owner, Madam Izzian plans to achieve a minimum profit of RM 2,000 in the month of January 2018. According to her, this amount is reasonable since the school will start in January and many parents would buy water bottle for their kids. Fixed costs which comprise mainly rental and salary are RM3,000 monthly. The cost of water bottles are expected to increase by 10% from its previous cost of RM6.90 per bottle and currently the selling price of each water bottle is RMI 4.90. Required: a) Compute the contribution to sales ratio. b) Calculate the break-even point in units and sales. c) Calculate the number of water bottle that Madam Izzian needs to sell in order to achieve a profit of RM150,000.

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Cost Volume Profit Analysis

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