Dalila Manufacturing Berhad (DMB) is suffering from the global economic effects for its main product. The product is sold in supermarkets throughout Malaysia. The following table shows the results of DMB's operations for 2021. Sales (12,500 units @ RM84) RM1,050,000 Variable costs (12,500 units @ RM63) 787,500 Contribution margin 262,500 Fixed costs 296,100 Operating profit (loss) (RM33,600) Required

(d) Prepare a contribution income statement showing the pretax and after tax income as per the requirement above.

(e) The manager believes that a RM60,000 increase in advertising would result in approximately a RM200,000 increase in annual sales. If the manager is right, what will the effect on the company's operating profit or loss?

(f) Refer to the original data. The vice president in charge of sales feels that a 10% reduction in price in combination with a RM40,000 increase in advertising will cause unit sales to increase by 25%. What effect would this strategy have on operating profit (loss)?

Answer rating: 100% (QA)

All Amt in RM Asnwer d Contribution Income Statement Sales 12500 units R... View the full answer