Due to erratic sales of its sole product, a high capacity battery of laptop computers, QRS Sdn Bhd had been experiencing difficulty for some time. The company's contribution format income statement for the recent month is given below:                                                                                                  RM Sales (@ RM35 per unit)                                                       717,500 Variable Cost                                                                         574,000 Contribution margin                                                             143,500 Fixed Cost                                                                             148,000 Net Operating Loss                                                                (4,500) Required: i. Compute the company's contruibution margin ratio and break - even point in both units and RM. ii. The company's CEO believes that a RM8,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an RM70,000 increase in monthly sales. If the CEO is right, what will be the effect on the comoany's monthly net operating income or loss? iii. Refer to the original data. The sales manager is convinced that 10% reduction in selling price, combined with an increase of RM8,000 in the monthly advertising budget, will cause unit sales to double. What will new contribution format income statement look like if these changes are adopted?

Due to erratic sales of its sole product, a high capacity battery of laptop computers, QRS Sdn Bhd had been experiencing difficulty for some time. The company's contribution format income statement for the recent month is given below:
                                                                                                 RM
Sales (@ RM35 per unit)                                                       717,500
Variable Cost                                                                         574,000
Contribution margin                                                             143,500
Fixed Cost                                                                             148,000
Net Operating Loss                                                                (4,500)

Required:
i. Compute the company's contruibution margin ratio and break - even point in both units and RM.

ii. The company's CEO believes that a RM8,000 increase in the monthly advertising budget, combined with an intensified effort by the sales staff, will result in an RM70,000 increase in monthly sales. If the CEO is right, what will be the effect on the comoany's monthly net operating income or loss?

iii. Refer to the original data. The sales manager is convinced that 10% reduction in selling price, combined with an increase of RM8,000 in the monthly advertising budget, will cause unit sales to double. What will new contribution format income statement look like if these changes are adopted?

iv. Refer to the original data. The marketing department thinks that a fancy new package for the laptop computer battery would help sales. The new package would increase packaging costs by 75 cents per unit. Assuming no other changes, how many units would have to be sold each month to earn a profit of RM9,750?