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QUESTION 2 The following information relates to Maju Sdn. Bhd. RM 60,000 20 Fixed costs per annum Selling price per unit Direct material cost per unit Direct labour cost per unit Variable overhead cost per unit 3 3 4 The company currently sells 8,000 units of its product. Required: The questions below should be answered independently: d) Due to an economic slowdown, sales volume is expected to reduce by 2,000 units. Therefore, the marketing manager decided to reduce the advertising expenses by RM10,000. The production manager decided to use a cheaper material which the price is 10% lower than before. What is the profit obtained? e) The company decided to pay their salesmen based on units sold i.e. RM2.50 for each unit rather than the fixed amount of RM12,000, What is the new break-even point (in value and in units?) ) How many additional units must be sold to meet an increase in machinery rental by RM8,000 per annum without any change in the current profit.

QUESTION 2 The following information relates to Maju Sdn. Bhd. RM 60,000 20 Fixed costs per annum Selling price per unit Direct material cost per unit Direct labour cost per unit Variable overhead cost per unit 3 3 4 The company currently sells 8,000 units of its product. Required: The questions below should be answered independently: d) Due to an economic slowdown, sales volume is expected to reduce by 2,000 units. Therefore, the marketing manager decided to reduce the advertising expenses by RM10,000. The production manager decided to use a cheaper material which the price is 10% lower than before. What is the profit obtained? e) The company decided to pay their salesmen based on units sold i.e. RM2.50 for each unit rather than the fixed amount of RM12,000, What is the new break-even point (in value and in units?) ) How many additional units must be sold to meet an increase in machinery rental by RM8,000 per annum without any change in the current profit.

Accounting
Accounting
27th Edition
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Chapter21: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 21.17EX
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QUESTION 2 The following information relates to Maju Sdn. Bhd. RM Fixed costs per annum Selling price per unit Direct material cost per unit Direct labour cost per unit Variable overhead cost per unit 60,000 20 3 3 4 The company currently sells 8,000 units of its product. Required: The questions below should be answered independently: d) Due to an economic slowdown, sales volume is expected to reduce by 2,000 units. Therefore, the marketing manager decided to reduce the advertising expenses by RM10,000. The production manager decided to use a cheaper material which the price is 10% lower than before. What is the profit obtained? e) The company decided to pay their salesmen based on units sold i.e. RM2.50 for each unit rather than the fixed amount of RM12,000. What is the new break-even point (in value and in units?) f) How many additional units must be sold to meet an increase in machinery rental by RM8,000 per annum without any change in the current profit.
Transcribed Image Text:QUESTION 2 The following information relates to Maju Sdn. Bhd. RM Fixed costs per annum Selling price per unit Direct material cost per unit Direct labour cost per unit Variable overhead cost per unit 60,000 20 3 3 4 The company currently sells 8,000 units of its product. Required: The questions below should be answered independently: d) Due to an economic slowdown, sales volume is expected to reduce by 2,000 units. Therefore, the marketing manager decided to reduce the advertising expenses by RM10,000. The production manager decided to use a cheaper material which the price is 10% lower than before. What is the profit obtained? e) The company decided to pay their salesmen based on units sold i.e. RM2.50 for each unit rather than the fixed amount of RM12,000. What is the new break-even point (in value and in units?) f) How many additional units must be sold to meet an increase in machinery rental by RM8,000 per annum without any change in the current profit.
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