Maria Enterprise produces single product, which has the following production cost per unit: The variable production...
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Maria Enterprise produces single product, which has the following production cost per unit: The variable production cost per unit is RM26.00 The budgeted fixed production overhead per month is RM25,000. Besides the production cost the company incurred the following cost too: Variable selling administrative cost Fixed selling and administrative cost RM 4.00 per unit. RM 15,000 per month The selling price is RM70.00 per unit. Monthly target sales volume is 7,000 units. Calculate: (a) Explain the meaning of break-even point and the importance of knowing it. (2 marks) (b) Contribution per unit (c) Break-even point in sales volume (d) The target profit at the target monthly sales volume of 7,000 units. (2 marks) (2 marks) (2 marks) (e) The expected sales volume to achieve a profit of RM60,000 per month. (2 marks) (f) If Maria Enterprise wishes to increase the sales volume by increasing the fixed selling and administrative cost by RM6,000, what would be the required sales volume to achieve the same target profit in part (d) above. (5 marks) Maria Enterprise produces single product, which has the following production cost per unit: The variable production cost per unit is RM26.00 The budgeted fixed production overhead per month is RM25,000. Besides the production cost the company incurred the following cost too: Variable selling administrative cost Fixed selling and administrative cost RM 4.00 per unit. RM 15,000 per month The selling price is RM70.00 per unit. Monthly target sales volume is 7,000 units. Calculate: (a) Explain the meaning of break-even point and the importance of knowing it. (2 marks) (b) Contribution per unit (c) Break-even point in sales volume (d) The target profit at the target monthly sales volume of 7,000 units. (2 marks) (2 marks) (2 marks) (e) The expected sales volume to achieve a profit of RM60,000 per month. (2 marks) (f) If Maria Enterprise wishes to increase the sales volume by increasing the fixed selling and administrative cost by RM6,000, what would be the required sales volume to achieve the same target profit in part (d) above. (5 marks)
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a The breakeven point is the level of sales at which the companys total revenue equals its total costs resulting in neither profit nor loss It represents the point where the company covers all its exp... View the full answer
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