(Note: All ratio calculations must be rounded up to the nearest two decimal)

Mr. Ali own a business producing banana chips for local market. The following are cost information for the business:

Required:

(a) Compute the companys contribution margin ratio. (2 marks)

(b) Compute break-even point (BEP) in both units and sales value. (4 marks)

(c) Assume next year the company want to earn a profit of RM5,000, how many packet of banana chips will have to be sold to earn the target profit? (2 marks)

Unit (RM) RM 26.90 21,520 Sales (800 packets) (-) Variable expenses: Direct material 9.80 7,840 Direct labour 7.50 6,000 7,680 9.60 Contribution margin (-) Fixed expenses: Fixed OH Fixed administrative Net operating income 3,600 2,500 1,580