TEST $2-$ Financial Management $($CLO$4)$

Question $3$

Kikilili Sdn$.$ Bhd$.($KSB$)$ produces the finest$-$quality fishing rods. The average selling price for

one of their rods is RM$250.$ The variable cost per unit is RM$110.$ KSB has average fixed costs

per year of RM$250000.$

a$.$ What is the break$-$even point in units for KSB$?$

b$.$ What is the break$-$even point in dollar sales?

c$.$ What would be the operating profit associated with the production and sale of $($i$)2000$

rods, $($ii$)5000$ rods?

d$.$ Determine the degree of operating leverage for the two levels of production and sales

given in part $($c$)$ above.