Selasih Company manufactures aluminium containers for restaurants. The owner of Selasih, Puan Atiqah, believes that an aggressive campaign is needed next year due to the Malaysian local market’s uncertain conditions. Presented below is the data for the current year 2021, for use in next year’s campaign. (see the photo) Puan Atiqah has set the sales target for the year 2022 at a level of RM550,000 (22,000 units of containers), or ten percent more than the sales in the year 2021. The selling price of the container is RM25 each, for both years. Required: “Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree with the
Selasih Company manufactures aluminium containers for restaurants. The owner of Selasih, Puan Atiqah, believes that an aggressive campaign is needed next year due to the Malaysian local market’s uncertain conditions. Presented below is the data for the current year 2021, for use in next year’s campaign. (see the photo) Puan Atiqah has set the sales target for the year 2022 at a level of RM550,000 (22,000 units of containers), or ten percent more than the sales in the year 2021. The selling price of the container is RM25 each, for both years. Required: “Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree with the
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 19E
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Selasih Company manufactures aluminium containers for restaurants. The owner of Selasih, Puan Atiqah, believes that an aggressive campaign is needed next year due to the Malaysian local market’s uncertain conditions. Presented below is the data for the current year 2021, for use in next year’s campaign.
(see the photo)
Puan Atiqah has set the sales target for the year 2022 at a level of RM550,000 (22,000 units of containers), or ten percent more than the sales in the year 2021. The selling price of the container is RM25 each, for both years.
Required:
- “Break-even analysis is of limited use to management because a company cannot survive by just breaking even.” Do you agree with the statement? Explain.
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