A company manufactures a single product. Budget and standard cost details for next year include: Selling...

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A company manufactures a single product. Budget and standard cost details for next year include: Selling price per unit RM100.00 Variable production cost per unit RM44.50 Fixed production costs RM150,000 Fixed selling and distribution costs RM85,000 Sales commission 5% of selling price Sales 80,000 units Required: (i) Calculate the break-even point in units. (4 marks) (ii) The marketing manager has suggested that the selling price per unit can be increased to RM125.00 if the sales commission is increased to 9% of selling price and a further RM35,000 is spent on advertising. Calculate the revised break-even point based on the marketing manager's suggestion. (3 marks) (ii) The marketing manager has suggested that the selling price per unit can be decreased to RM85.00 if the sales commission is reduced to 2% of selling price and a further RM15,000 is spent on distribution. Calculate the revised break-even point based on the marketing manager's suggestion. (3 marks) A company manufactures a single product. Budget and standard cost details for next year include: Selling price per unit RM100.00 Variable production cost per unit RM44.50 Fixed production costs RM150,000 Fixed selling and distribution costs RM85,000 Sales commission 5% of selling price Sales 80,000 units Required: (i) Calculate the break-even point in units. (4 marks) (ii) The marketing manager has suggested that the selling price per unit can be increased to RM125.00 if the sales commission is increased to 9% of selling price and a further RM35,000 is spent on advertising. Calculate the revised break-even point based on the marketing manager's suggestion. (3 marks) (ii) The marketing manager has suggested that the selling price per unit can be decreased to RM85.00 if the sales commission is reduced to 2% of selling price and a further RM15,000 is spent on distribution. Calculate the revised break-even point based on the marketing manager's suggestion. (3 marks)

Answer rating: 100% (QA)

Answer i To calculate the breakeven point in units we need to find the level of sales at which total ... View the full answer