Kobeteen Enterprise started a company selling health food products of mixed dried fruits, seeds and nuts on January 2020 .The business sells prepacked packages of its product through online retailing to individual customers . It has online shops account on social medias (Instagram and Facebook). The product mix of the company can be divided into two categories, that are : mix dried fruits and mix seeds and nuts. Each categories are packed in 200gram, 500 gram and 1 kilogram package sizes for customers. The mix dried fruits consist of dried apricot, figs, black and golden currants whilst the mix seeds and nuts consists of sunflower seeds, almond nuts, cashew nuts, black sesame seeds. 

The cost per 100 gram of products are as follows :

 Product and Cost per 100 gm

i)Dried fruits mix RM 5              ii)Seeds and nuts mix RM 7

Additional information for the business costs are as follows :

• The business started its operation using cash of RM8,000 from the owner.

• In early January the business recruited two temporary workers for sales work. They work only 4 hours per day for 20 days per month. They are paid an hourly rate RM4 per hour

• The owner secured a personal higher purchase loan of RM30,000 for a second hand van to be used for business purposes in January. Instalments repayment for the loan per month is at RM500 and will be paid at the start of each month from February by the owner personally.

• Apart from the van, the company also has a laptop, costing RM1,800 and packaging equipment costing RM1,200.

• Depreciation expenses for van, laptop and packaging equipment are estimated at RM550 per month.

• Sales are all done in cash. Customers are required to transfer payment before products are post out.

• Postage charges of products bought are entirely paid by customers and are not included as cash inflows and outflows

• Purchases of raw materials in January and February are RM1,800 and RM2,200 respectively. All purchases in January was paid in cash whilst 85 percent of purchases in February are cash with the remaining to be fully paid off in the following month.

• Utilities expenses are RM320 per month but internet fees of RM150 have not been paid yet in February.

• Packaging expenses for each month is RM80.

Required :

a) Find the profit margin per 100 gm for each categories of product as the company adopts a cost plus profit pricing strategy as follows :

 Product Pricing Strategy per 100 gm

i) Dried fruits mix Cost plus 10 percent profit

ii) Seeds and nuts mix Cost plus 15 percent profit

B) Determine the sales price for the package sizes of 200 gm, 500 gm and 1 kilogram for each product categories.

Answer rating: 100% (QA)

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