INSTRUCTION: This section consists of TWO (2) essay questions. Answer ALL questions. ARAHAN: Bahagian ini mengandungi DUA (2) soalan esei. Jawab SEMUA soalan. QUESTION 1 CLOI a) Niker produces and sells 500,000 units of the Star model of basketball shirt. The selling price С4 is RM35, and there is excess capacity to produce an additional 300,000 shirts. The absorption cost of the shirts is RM10,000,000 , consisting of material cost of RM5,000,000, Wages cost RM2,000,000 and variable manufacturing costs of RM3,000,000 . Variable selling and administrative costs are RM 3 per shirt, and fixed selling and administrative costs are RM 2,000,000. Assume Niker receives an offer from Sports Authority to buy 100,000 shirts at a price of RM 18.00 per shirt. If Niker accepts the order it would not incur any additional variable selling and administrative costs, but it would have to pay a flat fee of RM 80,000 to the manufacturer's agent who had obtained the potential order. Determine whether Niker should or should not accept the special order, CLO1 b) Based on the information at (a), one company from outside offer Niker to buy ready made С4 shirt at price RM20 per unit plus transportation cost RM1,000 per delivery. If Niker agree to buy, they need to pay additional RM1.20 per unit for labelling cost before sell it out. Assume that Niker wants to produce only 5,000 shirts , determine whether Niker BUY or just MAKE the shirts. CLO1 c) Calculate the Break Even Point in Unit and Ringgit Malaysia for the Company. C3
INSTRUCTION: This section consists of TWO (2) essay questions. Answer ALL questions. ARAHAN: Bahagian ini mengandungi DUA (2) soalan esei. Jawab SEMUA soalan. QUESTION 1 CLOI a) Niker produces and sells 500,000 units of the Star model of basketball shirt. The selling price С4 is RM35, and there is excess capacity to produce an additional 300,000 shirts. The absorption cost of the shirts is RM10,000,000 , consisting of material cost of RM5,000,000, Wages cost RM2,000,000 and variable manufacturing costs of RM3,000,000 . Variable selling and administrative costs are RM 3 per shirt, and fixed selling and administrative costs are RM 2,000,000. Assume Niker receives an offer from Sports Authority to buy 100,000 shirts at a price of RM 18.00 per shirt. If Niker accepts the order it would not incur any additional variable selling and administrative costs, but it would have to pay a flat fee of RM 80,000 to the manufacturer's agent who had obtained the potential order. Determine whether Niker should or should not accept the special order, CLO1 b) Based on the information at (a), one company from outside offer Niker to buy ready made С4 shirt at price RM20 per unit plus transportation cost RM1,000 per delivery. If Niker agree to buy, they need to pay additional RM1.20 per unit for labelling cost before sell it out. Assume that Niker wants to produce only 5,000 shirts , determine whether Niker BUY or just MAKE the shirts. CLO1 c) Calculate the Break Even Point in Unit and Ringgit Malaysia for the Company. C3
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:INSTRUCTION:
This section consists of TWO (2) essay questions. Answer ALL questions.
ARAHAN:
Bahagian ini mengandungi DUA (2) soalan esei. Jawab SEMUA soalan.
QUESTION 1
CLOI a) Niker produces and sells 500,000 units of the Star model of basketball shirt. The selling price
С4
is RM35, and there is excess capacity to produce an additional 300,000 shirts. The absorption
cost of the shirts is RM10,000,000 , consisting of material cost of RM5,000,000, Wages cost
RM2,000,000 and variable manufacturing costs of RM3,000,000 .
Variable selling and administrative costs are RM 3 per shirt, and fixed selling and
administrative costs are RM 2,000,000. Assume Niker receives an offer from Sports Authority
to buy 100,000 shirts at a price of RM 18.00 per shirt. If Niker accepts the order it would not
incur any additional variable selling and administrative costs, but it would have to pay a flat fee
of RM 80,000 to the manufacturer's agent who had obtained the potential order.
Determine whether Niker should or should not accept the special order,
CLO1 b) Based on the information at (a), one company from outside offer Niker to buy ready made
С4
shirt at price RM20 per unit plus transportation cost RM1,000 per delivery. If Niker agree to buy,
they need to pay additional RM1.20 per unit for labelling cost before sell it out. Assume that
Niker wants to produce only 5,000 shirts , determine whether Niker BUY or just MAKE
the shirts.
CLO1 c) Calculate the Break Even Point in Unit and Ringgit Malaysia for the Company.
C3
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