Question: SECTION B (30 Marks) There are THREE (3) questions in this section. Answer ALL questions in the question paper. Question 1 The following information pertains

SECTION B (30 Marks) There are THREE (3) questions in this section. Answer ALL questions in the question paper. Question 1 The following information pertains to Beauty Berhad Selling price per unit : RM180 Variable cost per unit : RM80 Fixed cost per year : RM400,000 Debt financing : RM800,000 at 10% interest Number of shares : 400,000 shares Tax rate : 24% Required: At a sales level of 50,000 units: a. Calculate the break-even point in Ringgit. (2 Marks) b. Calculate the degree of operating leverage (DOL), degree of financial leverage (DFL) and degree of total leverage (DTL). (3 Marks) c. Referring to your answer in (b), show the effect on the earnings per share (EPS) if: i. Sales increase by 20% ii. Sales decrease by 30% (5 Marks) (Total: 10 Marks)
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
