Question: Ehsan manufacturing Sdn Bhd reported its financial condition as follows: sales RM100,000, cost of goods RM80,0000, finance cost RM6,000, taxes at 25% RM3,500, and profit
Ehsan manufacturing Sdn Bhd reported its financial condition as follows: sales RM100,000, cost of goods RM80,0000, finance cost RM6,000, taxes at 25% RM3,500, and profit RM10,500. The management of Ehsan plans to increase the profit. There are three alternatives i.e. increasing sales or reduction finance cost or reduction of production cost. Based on the experiences and capability of the company, sales can be increased 45%, finance cost can reduced to 50% and 15% for production cost reduction. Differentiate the profits for each of the three option strategies.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
