Question: QUESTION 2 (25 MARKS) Information concerning Smith Bhd.'s single product is as follows: Selling price Variable production cost Variable selling cost RM per unit

QUESTION 2 (25 MARKS) Information concerning Smith Bhd.'s single product is as follows: Selling price Variable production cost Variable selling cost RM per unit 8.00 3.00 1.80 7,800 5,000 Fixed production cost Fixed selling cost Budgeted production and sales for the year are 5,000 units. Required: a. Describe the usefulness of Cost-volume-profit (CVP) analysis. (4 MARKS) b. State THREE (3) limitations of CVP analysis. (3 MARKS) C. Calculate the followings: i. Break-even point (in units and RM) (5 MARKS) ii. Profit earned if the sales are 5,000 units. (4 MARKS) d. Prepare a CVP graph by using the answers calculated in part (c) above. (4 MARKS) e. Determine the required sales (in units and RM) to achieve a target profit of RM10,000. (5 MARKS)

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