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QUESTION 3 (25 MARKS) Aman Sdn Bhd has provided the following contribution format income statement. All questions concem situations that are within the relevant range. RM 500,000 220,000 Sales (10,000 units) Variable expenses Contribution Margin Fixed Expenses 280.000 168,000 Net Operating Income 112.000 Required: a. Determine: i. The contribution margin per unit (2 marks) (CLO2:PLO5:07) ii. The variable expenses ratio (2 marks) (CLO2:PLOS:C7) 111. The breakeven point in total sales (2 marks) (CLO2:PLOS:C7) b. If sales decline to 6,000 units, determine the estimated net operating income. (3 marks) (CLO2:PLO5:07) c. If the variable cost per unit increases by RM5, spending on advertising increase by RM2,000 and unit sales increase by 3,000 units, calculate the estimate net operating income? (12 marks) (CLO2:PLOS:CT) d Estimate how many units must be sold to achieve a target profit of RM 672,000 (4 marks) (CLO2:PLOS:C7) Profit = (Sales Variable expenses) Fixed expenses Quantity sold (Q) * Selling price per unit (P) Sales (Q x P) Quantity sold (Q) * Variable expenses per unit (V) = Variable expenses (Q x V) Profit = (P x Q-V X Q) Fixed expenses Unit CM = Selling price per unit Variable expenses per unit Unit CM = P-V Profit = (P x Q-V X Q) Fixed expenses Profit = (P V) * Q Fixed expenses Profit = Unit CM X Q - Fixed expenses Contribution margin CM ratio = Sales Variable expense ratio Variable expenses Sales Profit = (CM ratio x Sales) Fixed expenses Unit sales to break even = Fixed expenses Unit CM Unit sales to attain the target profit = Target profit + Fixed expenses CM per unit