Syarikat Padu manufactures three different types of desks: Jati, Rubber, and Rattan. Now, space is limited in the factory and there is a restriction on the number of machine-hours available. Costs and selling price information for the financial year 1 January to 31 December 2022 for each type of desk is as follows:

	Jati Desk	Rubber Desk	Rattan Desk
	RM	RM	RM
Selling price per unit	1,750	1,600	1,650
Variable materials costs:
Wood and plastics	480	460	486
Screws and fixings	20	20	20
Variable labour costs	180	160	160
Variable machine costs	50	40	44
Share of fixed costs	220	240	200
Machine hours required per unit	2.5 hours	2.0 hours	2.2 hours
Sales demand in units for 2020	1350	1550	1450

Machine hours available are 4,000 hours during 2022.

Fixed costs for 2022 are expected to be RM940,000.

Required:

(a) Calculate the number of units the business would need to sell to break even if it were to produce only Rattan Desk in 2022. (Assume for this that there is no effective limit to market size and resource availability).

Answer rating: 100% (QA)

a Number of Rattan desk to be sold in 2022 Fixed cost Contribution ... View the full answer