An important part of processing is performed by a machine that is currently being leased for RM200,000 per month. Redang Agroternak has been offered an arrangement (Royal Plan) whereby it would pay RM0.10 royalty per units processed by the machine rather than the monthly leas.

b) An important part of processing is performed by a machine that is currently being leased for RM200,000 per month. Redang Agrotemak has been offered an arrangement (Royal Plan) whereby it would pay RM0.10 royalty per units processed by the machine rather than the monthly leas. i. Prepare the contribution margin income statement to compute the net income under the Royalty Plan. Should the company choose the lease or the Royalty Plan? (5 marks) ii. Under the Royalty Plan compute break-even point in units (2 marks) ii. Under the Royalty Plan compute break-even point in Ringgit. (2 marks) iv. Under the Royalty Plan determine the sales in units that would be required to produce net operating income of RM900,000. (2 marks) Explain TWO (2) important uses of Cost-Volume-Profit analysis to the business. (4 marks) END OF QUESTION PAPER c)