CeDe Sdn Bhd, operating at full capacity, sold 150,000 units at a price of RM116 per unit during the current year. Its income statement is as follows: Sales .... Cost of goods sold Gross profit...... Expenses: Selling expenses.. Administrative expenses.... Total expenses. Income from operations..... RM4,000,000 3,000,000 The division of costs between variable and fixed is as follows: Variable 80% 75% 70% Cost of goods sold Selling expenses RM17,400,000 6,000,000 RM11,400,000 7,000,000 RM 4,400,000 Fixed 20% 25% 30% Administrative expenses Management is considering a plant expansion program for the following year that will permit an increase of RM3,625,000 in yearly sales. The expansion will increase fixed costs by RM1,000,000 but will not affect the relationship between sales and variable costs.

CeDe Sdn Bhd, operating at full capacity, sold 150,000 units at a price of RM116 per unit during the current year. Its income statement is as follows: The division of costs between variable and fixed is as follows: Management is considering a plant expansion program for the following year that will permit an increase of RM3,625,000 in yearly sales. The expansion will increase fixed costs by RM1,000,000 but will not affect the relationship between sales and variable costs. 4. Compute the break-even sales (units) under the proposed program for (the following year.) 5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the RM4,400,000 of income from operations that was earned in the current year. 6. Determine the maximum income from operations possible with the expanded plant. 7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for (the following year?)