Question: Case Study 5 Ah Beng lost his job during MCO, he understands that he has to find a fast solution to earn money to support

 Case Study 5 Ah Beng lost his job during MCO, he

Case Study 5 Ah Beng lost his job during MCO, he understands that he has to find a fast solution to earn money to support his family. He plans to sell homemade pizza through online platforms such as Food-panda or Get-food. The fixed operating costs occur are shop rental of RM12,000, utility expenses will increase to RM22.000 per annum and the renewal business license per annum will be RM1.700. The average variable operating cost per pizza is RM15. Ah Beng's pizza is selling at an average price of RM30. You are required to: (a) Estimate the number of pizza to sell to break-even (2 marks) (b) If the variable operating cost of RM5 is reduced per pizza determine what would happen to the operating break-even quantity (2 marks) (c) Based on your answer in (a), if fixed operating cost increases 50 percent per year, calculate the effect on the operating break-even quantity (2 marks) (d) Based on the information in (a), compute the degree of operating leverage (DOL) at the current sales level of RM120,000 (2 marks) (e) Based on the answer in (d), if sales are expected to increase by 20 percent from the current sales position of RM120.000 calculate the percentage and amount change in the operating profit (EBIT) from its current position (2 marks) (Total: 10 marks)

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