The directors of Red Pink Sdn Bhd, a business which makes only one product, have been...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The directors of Red Pink Sdn Bhd, a business which makes only one product, have been reviewing the following summarized profit and loss account for the quarter just ended. Sales (60,000 units) RM4,800,000 Direct material cost RMI,680,000 Direct Labour cost RM 960,000 Production Overhead Administration overhead Selling Overhead RM1,040,000 RM 720,000 RM 180,000 (RM4,880,000) Loss (RM 80,000) Additional information (1) The production overhead includes variable production overhead at RM4.00 per unit. Administration overhead and selling overhead are fiully lixed. Required: a. Contribation per unit and contriburion sales ratio cis ratio. (2 marks) The break-eveu point in unils aud value. (2marks) b. c. The following alternative proposals have been put forward to improve profits in the current quarter. Determine the target profit expected and break-even point (to the nearest unit of product) for each of the following alternative proposals separately: O Reduce selling price by 10% , expecting sales volume to increase by 40% (4 marks) (ii) Reduce fixed cost by 5% (4 marks) (iii) Increase wage rate by 25%, expecting production and sales volume to increase by 20% (4 marks) (iv) Introduce cost reduction programme to reduce prime cost by RM4 per unit. Spend RM400,000 on advertising and expect sales volume to increase by 10%. (4 marks) The directors of Red Pink Sdn Bhd, a business which makes only one product, have been reviewing the following summarized profit and loss account for the quarter just ended. Sales (60,000 units) RM4,800,000 Direct material cost RMI,680,000 Direct Labour cost RM 960,000 Production Overhead Administration overhead Selling Overhead RM1,040,000 RM 720,000 RM 180,000 (RM4,880,000) Loss (RM 80,000) Additional information (1) The production overhead includes variable production overhead at RM4.00 per unit. Administration overhead and selling overhead are fiully lixed. Required: a. Contribation per unit and contriburion sales ratio cis ratio. (2 marks) The break-eveu point in unils aud value. (2marks) b. c. The following alternative proposals have been put forward to improve profits in the current quarter. Determine the target profit expected and break-even point (to the nearest unit of product) for each of the following alternative proposals separately: O Reduce selling price by 10% , expecting sales volume to increase by 40% (4 marks) (ii) Reduce fixed cost by 5% (4 marks) (iii) Increase wage rate by 25%, expecting production and sales volume to increase by 20% (4 marks) (iv) Introduce cost reduction programme to reduce prime cost by RM4 per unit. Spend RM400,000 on advertising and expect sales volume to increase by 10%. (4 marks)
Expert Answer:
Answer rating: 100% (QA)
1 Contribution margin per unit Contribution margin ratio 32 40 Working notes Sales Less Variable cos... View the full answer
Related Book For
International Financial Reporting A Practical Guide
ISBN: 978-1292200743
6th edition
Authors: Alan Melville
Posted Date:
Students also viewed these accounting questions
-
You are presented with the following information Starter Profit and loss account for the year to 31 March 2012 Sales 10000 Purchases 5000 Less Closing stock 1000 4000 Gross profit 6000 Less...
-
What kinds of items in a profit and loss account do not involve a flow of cash?
-
A company which makes only one type of product incurs fixed production overheads of 240,000 during the year to 31 March 2018. Normal production capacity is 80,000 units per annum. Calculate the...
-
This can be anything - goods or services; in which you reflect upon your understanding of the ideal marketing mix for your proposed product/service. please explain for me in details and sources?
-
Gunkelson Company sells equipment on September 30, 2017, for $18,000 cash. The equipment originally cost $72,000 and as of January 1, 2017, had accumulated depreciation of $42,000. Depreciation for...
-
On December 31, 2023, Corotel Companys year-end, the unadjusted trial balance included the following items: Required 1. Prepare the adjusting entry needed in Corotels books to recognize bad debts...
-
P 95 Use the Standard Normal Table or technology to find the z-score that corresponds to the cumulative area or percentile. Table 4-Standard Normal Distribution Arca Z 0 Z .09 .08 .07 .06 .05 .04 .03...
-
What is a master budget and what are the guidelines that enhance its understandability and comparability?
-
Quirk Corporation issued a 100% stock dividend of its $10 par value common stock. What amount of retained earnings will be capitalized for the additional shares issued?
-
A maker of a certain brand of low-fat cereal bars claims that their average saturated fat content is 0.5 gram. In a random sample of 8 cereal bars of this brand the saturated fat content was 0.6....
-
You've been given the address 150.25.14.5/12. Calculate the subnet mask. Show in decimal form.
-
Use Petri nets instead of a finite state machine to represent the door - control subsystem of elevators depicted in Figure 5.2 . Figure 5.2. Else Open Else Fault C CC, CB DO OB, SE, PC OB, SE, PC...
-
Virtual machines, such as the Java Virtual Machine ( JVM ), can make the applications software easily portable to diverse hardware platforms. Would it be feasible to consider a similar virtual...
-
A mapping from advantageous software engineering principles to desired software qualities is sketched in Table 6.4 . Give specific explanations why Modularity is mapping to Reliability, ...
-
Draw a statechart model of the control software for a simple digital camera. State clearly your assumptions regarding specific features of the camera.
-
UML s use - case diagrams (see Fig. 5.14 ) are usually complemented by textual descriptions; what kind of information do they contain? OK COP ECS Communicate with the Group Dispatcher Register Car...
-
1. In an experiment to determine the value of*, a cylinder is measured to have an average value of 4.25 cm for its diameter and an average value of 13.39 cm for its circumference. What is the...
-
In your readings, there were many examples given for nurturing close family relationships in this ever-evolving technological society we live in Based upon your readings and research describe three...
-
Accounting standard IAS16 Property, Plant and Equipment makes a number of recognition, measurement and disclosure requirements with regard to tangible non current assets. The term "non-current asset"...
-
A customer buys three DVDs from a mail order company. These DVDs could have been bought separately and are regarded as distinct. The prices normally charged for the DVDs (if bought separately) are...
-
(a) Explain the term "historical cost accounting". (b) Summarise the strengths and weaknesses of historical cost accounting. (c) Identify and briefly explain the two main alternatives to historical...
-
Model your car by using analogy approach and stable approach. Which one do you like more and why?
-
Model your dream house by using analogy approach and stable approach. Which one do you like more and why?
-
Try to find 23 scenarios where this pattern can be applicable.
Study smarter with the SolutionInn App