Sea Monster Corporation is a manufacture of solar cell widgets. The fixed costs for operating the...

 

Transcribed Image Text:

Sea Monster Corporation is a manufacture of solar cell widgets. The fixed costs for operating the solar cell widget factory are RM100,000 per year. Each solar cell widget sells for RM10, and the variable cost per solar cell widget is RM4. Required: i. ii. iii. iv. V. Calculate the break-even point in terms of the number of Solar Cell widgets that need to be sold to cover the fixed costs. (5 marks) Once the break-even point is reached, what is the profit eamed for each additional solar cell widget sold beyond the break-even quantity? (5 marks) How many units must be sold to obtain RM30,000 profit? Assume that Company Sea Monster Corporation plans to increase the selling price of each solar cell widget to RM12. Recalculate the break-even point with the new selling price. (5 marks) (5 marks) The company is considering investing in a new production technology that would increase the variable cost per widget to RM6 but would also allow them to reduce the selling price to RM9. Should the company make this investment? Explain your answer using a marginal cost break- even analysis. (5 marks) What additional sales volume is required to meet RM8,000 extra fixed charge from a proposed plant expansion? (5 marks) Sea Monster Corporation is a manufacture of solar cell widgets. The fixed costs for operating the solar cell widget factory are RM100,000 per year. Each solar cell widget sells for RM10, and the variable cost per solar cell widget is RM4. Required: i. ii. iii. iv. V. Calculate the break-even point in terms of the number of Solar Cell widgets that need to be sold to cover the fixed costs. (5 marks) Once the break-even point is reached, what is the profit eamed for each additional solar cell widget sold beyond the break-even quantity? (5 marks) How many units must be sold to obtain RM30,000 profit? Assume that Company Sea Monster Corporation plans to increase the selling price of each solar cell widget to RM12. Recalculate the break-even point with the new selling price. (5 marks) (5 marks) The company is considering investing in a new production technology that would increase the variable cost per widget to RM6 but would also allow them to reduce the selling price to RM9. Should the company make this investment? Explain your answer using a marginal cost break- even analysis. (5 marks) What additional sales volume is required to meet RM8,000 extra fixed charge from a proposed plant expansion? (5 marks)

Answer rating: 100% (QA)

i BreakEven Point Calculation BreakEven Point in units Fixed Costs Contribution Margin per unit Fixe... View the full answer