Cost-Volume-Profit (CVP) analysis can be used to determine the effect of changes in costs and volumes...

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Cost-Volume-Profit (CVP) analysis can be used to determine the effect of changes in costs and volumes on a company's net profits. This project assignment assumes that you are newly hired as an account executive position on a specific CVP business case. In this CVP analysis activity, you will learn how to use a set of equations to solve various problems related to CVP analysis in the company. Assumes that the unit selling price, total fixed costs, and variable unit prices are constant. The purpose of this assignment is to familiarise to CVP analysis techniques and help students understand the importance and usefulness of accounting information for managers in decision-making. Hence. based on provided information below, you need to conduct CVP analysis, analyse and provide suggestions for future planning. Hopefully, it may enhance your understanding about the application of CVP analysis in businesses. SNIPPIES CURRENT SCENARIO SNIPPIES Sdn Bhd manufactures a special toy called KidsW that are sold through a network of sales agents throughout Malaysia. The company sold 60,000 units of KidsW in 2023 with equivalent to sales amounting to RM1,200,000. The sales agents are currently paid at 15% commission on sales. The following is the pro forma (projected) statement of profit or loss and other comprehensive income for the year ended 31 December 2023. SNIPPIES Sdn Bhd Pro Forma Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 December 2023 Sales Cost of Goods Sold: Variable Fixed Gross Profit Operating expenses: Sales Commision Fixed Advertising Expenses General and Administrative Expenses: Rental expenses Administrative Salaries Expenses Insurance Expenses 600,000 120.000 180,000 30,000 24,000 60,000 18,000 1,200,000 720,000 480,000 312,000 168,000 Net Income The management is aware that for the year 2023, the net income to sales ratio (net income divide by sales) is less than 20%, the average ratio for other companies in similar industries. Therefore, the company targets to obtain a net profit of 30% in 2024 to compete with the competitors. In order to achieve that, a few alternatives plan should be considered. Answer this question below: 1. Calculate the Break-Even Point (BEP) in units and amount and identify the number of units of product KidsW that need to be sold by the company in order to obtain a net income of 30% of sales. Briefly describe possible actions that should be taken by the company to achieve the target. Cost-Volume-Profit (CVP) analysis can be used to determine the effect of changes in costs and volumes on a company's net profits. This project assignment assumes that you are newly hired as an account executive position on a specific CVP business case. In this CVP analysis activity, you will learn how to use a set of equations to solve various problems related to CVP analysis in the company. Assumes that the unit selling price, total fixed costs, and variable unit prices are constant. The purpose of this assignment is to familiarise to CVP analysis techniques and help students understand the importance and usefulness of accounting information for managers in decision-making. Hence. based on provided information below, you need to conduct CVP analysis, analyse and provide suggestions for future planning. Hopefully, it may enhance your understanding about the application of CVP analysis in businesses. SNIPPIES CURRENT SCENARIO SNIPPIES Sdn Bhd manufactures a special toy called KidsW that are sold through a network of sales agents throughout Malaysia. The company sold 60,000 units of KidsW in 2023 with equivalent to sales amounting to RM1,200,000. The sales agents are currently paid at 15% commission on sales. The following is the pro forma (projected) statement of profit or loss and other comprehensive income for the year ended 31 December 2023. SNIPPIES Sdn Bhd Pro Forma Statement of Profit or Loss and Other Comprehensive Income For the Year Ended 31 December 2023 Sales Cost of Goods Sold: Variable Fixed Gross Profit Operating expenses: Sales Commision Fixed Advertising Expenses General and Administrative Expenses: Rental expenses Administrative Salaries Expenses Insurance Expenses 600,000 120.000 180,000 30,000 24,000 60,000 18,000 1,200,000 720,000 480,000 312,000 168,000 Net Income The management is aware that for the year 2023, the net income to sales ratio (net income divide by sales) is less than 20%, the average ratio for other companies in similar industries. Therefore, the company targets to obtain a net profit of 30% in 2024 to compete with the competitors. In order to achieve that, a few alternatives plan should be considered. Answer this question below: 1. Calculate the Break-Even Point (BEP) in units and amount and identify the number of units of product KidsW that need to be sold by the company in order to obtain a net income of 30% of sales. Briefly describe possible actions that should be taken by the company to achieve the target.

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To calculate the BreakEven Point BEP and the number of units of product KidsW needed to achieve a net income of 30 of sales well first need to gather ... View the full answer