QUESTION 2 Syarikat Hashira sells uniforms. Its most popular product is the Haori. In November, a...

 

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QUESTION 2 Syarikat Hashira sells uniforms. Its most popular product is the Haori. In November, a total of 100,000 units of Haori were produced and sold. The following information on Haori is available for November 2023: Syarikat Hashira CVP Income Statement for the month ended 30 November 2023 RM Sales Less: Variable Costs Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Contribution Margin Less: Fixed Costs Fixed manufacturing overhead Fixed selling and administrative expenses Net Income 1,100,000 750,000 250,000 400,000 1,250,000 625,000 RM 5,000,000 2,500,000 2,500,000 1,875,000 RM 625,000 Nezuko, the owner, is planning to change her raw materials supplier in January 2024. She expects the cost of her direct materials to increase by RM2.00 with the change. The unit selling price will be adjusted to 90% of the current quoted price. This adjustment is expected to increase the sales volume to 150,000 units. Nezuko does not expect any changes to the fixed costs in 2024. Required: a) b) c) Determine the variable cost per unit for the Haori in November. e) (1 mark) Present the costs of Haori in November 2023 as a total cost equation (Y=mx+C). (3 marks) For the month ending 30 November 2023 (no changes made), determine the: (i) break-even point in units (5 marks) (ii) degree of operating leverage (2 marks) (iii) amount of change on net income* if the sales revenue is expected to increase by 10% in December 2023. *DO NOT prepare an income statement. Show ALL workings where necessary. (3 marks) d) If Nezuko decides to proceed with the change in January 2024, determine the: Round your answers to 2 decimal places where necessary. (i) total contribution margin (4 marks) (ii) break-even point in units (3 marks) (iii) degree of operating leverage (3 marks) (iv) sales required in Ringgit Malaysia (RM) to earn a net income of RM825,000 (6 marks) Should Nezuko implement the proposed changes in 2024? Explain your decision. (5 marks) QUESTION 2 Syarikat Hashira sells uniforms. Its most popular product is the Haori. In November, a total of 100,000 units of Haori were produced and sold. The following information on Haori is available for November 2023: Syarikat Hashira CVP Income Statement for the month ended 30 November 2023 RM Sales Less: Variable Costs Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative expenses Contribution Margin Less: Fixed Costs Fixed manufacturing overhead Fixed selling and administrative expenses Net Income 1,100,000 750,000 250,000 400,000 1,250,000 625,000 RM 5,000,000 2,500,000 2,500,000 1,875,000 RM 625,000 Nezuko, the owner, is planning to change her raw materials supplier in January 2024. She expects the cost of her direct materials to increase by RM2.00 with the change. The unit selling price will be adjusted to 90% of the current quoted price. This adjustment is expected to increase the sales volume to 150,000 units. Nezuko does not expect any changes to the fixed costs in 2024. Required: a) b) c) Determine the variable cost per unit for the Haori in November. e) (1 mark) Present the costs of Haori in November 2023 as a total cost equation (Y=mx+C). (3 marks) For the month ending 30 November 2023 (no changes made), determine the: (i) break-even point in units (5 marks) (ii) degree of operating leverage (2 marks) (iii) amount of change on net income* if the sales revenue is expected to increase by 10% in December 2023. *DO NOT prepare an income statement. Show ALL workings where necessary. (3 marks) d) If Nezuko decides to proceed with the change in January 2024, determine the: Round your answers to 2 decimal places where necessary. (i) total contribution margin (4 marks) (ii) break-even point in units (3 marks) (iii) degree of operating leverage (3 marks) (iv) sales required in Ringgit Malaysia (RM) to earn a net income of RM825,000 (6 marks) Should Nezuko implement the proposed changes in 2024? Explain your decision. (5 marks)

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a Calculate the variable cost per unit for the Haori in November as follows Variable Cost per unitTo... View the full answer