Alvina has just graduated in accounting and she is very excited to run her own business....
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Alvina has just graduated in accounting and she is very excited to run her own business. Thus, Alvina has opened a store known as Alvina Apparel that produces and sells dresses. The following data were recorded for the year of 2021 in selling 1200 units of dresses: RM Selling price per unit 98.00 Variable expenses per unit 33.00 Fixed expenses per year: Store rental 15,000 Depreciation of sewing machine Selling expenses Administrative expenses 12,000 24,000 20,500 The store expects the same costs as per last year will incur in the current year, which is 2022. Required: a. Determine the break-even point in units and sales value of 2021. (5 marks) b. Calculate the contribution margin ratio and margin of safety in sales value of the store for 2021. (4 marks) c. Calculate the store's profit for 2021. (4 marks) d. In order to increase sales of 2022, Alvina is considering to pay the sales person's commission of RM10 per unit of dress sold. If the additional cost is made, evaluate the impact of the change to the break-even point (unit and sales value) as compared to 2021. (4 marks) e. If Alvina targets to sell in average 120 dresses per month in 2022, calculate the amount of profit she would earn in the year. (4 marks) f. Advise Alvina on the additional unit of dresses that she must sell in 2022 if she decides to earn a profit of RM20,000. (4 marks) Alvina has just graduated in accounting and she is very excited to run her own business. Thus, Alvina has opened a store known as Alvina Apparel that produces and sells dresses. The following data were recorded for the year of 2021 in selling 1200 units of dresses: RM Selling price per unit 98.00 Variable expenses per unit 33.00 Fixed expenses per year: Store rental 15,000 Depreciation of sewing machine Selling expenses Administrative expenses 12,000 24,000 20,500 The store expects the same costs as per last year will incur in the current year, which is 2022. Required: a. Determine the break-even point in units and sales value of 2021. (5 marks) b. Calculate the contribution margin ratio and margin of safety in sales value of the store for 2021. (4 marks) c. Calculate the store's profit for 2021. (4 marks) d. In order to increase sales of 2022, Alvina is considering to pay the sales person's commission of RM10 per unit of dress sold. If the additional cost is made, evaluate the impact of the change to the break-even point (unit and sales value) as compared to 2021. (4 marks) e. If Alvina targets to sell in average 120 dresses per month in 2022, calculate the amount of profit she would earn in the year. (4 marks) f. Advise Alvina on the additional unit of dresses that she must sell in 2022 if she decides to earn a profit of RM20,000. (4 marks)
Expert Answer:
Answer rating: 100% (QA)
Contribution Selling Price Variable cost RM9800 RM3300 Contribution per unit RM6500 Fixed cost 15000... View the full answer
Related Book For
Introduction to Probability and Statistics
ISBN: 978-1133103752
14th edition
Authors: William Mendenhall, Robert Beaver, Barbara Beaver
Posted Date:
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