Question: NAME: _____________ SECTION: ____________ FINANCIAL MANAGEMENT Test 2 Question 1 Mee Kolok Berhad has estimated the following income statement for its next fiscal year. Sales

NAME: _____________

SECTION: ____________

FINANCIAL MANAGEMENT Test 2

Question 1 Mee Kolok Berhad has estimated the following income statement for its next fiscal year.

Sales RM20,000,000

Variable costs 6,000,000

Contribution Margin 14,000,000

Fixed costs 9,000,000

EBIT 5,000,000

Interest expense 900,000

Earnings before taxes 4,100,000

Taxes (35%) 1,435,000

Net income RM2,665,000

Required: What is the break-even point in sales dollars for the firm? If the average unit cost is RM20, what is the break-even point in units?

Currently the number of shares outstanding is 2,000,000 shares. If Mee Koloks sales next year increase by 20%, what will be Mee Kolok's earnings per share? If Mee Koloks sales next year increase by 20%, calculate the percentage of increase for EBIT.

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