1.Hohobag supplies luggage under the brand name Biggy. Its selling price is RM 135 per unit and the variable cost for each unit is RM 75. The fixed costs incurred for that particular month are as follows:

Rental of machine RM 32,600

Workers' salaries RM 41,850

Delivery RM 37,750

a) What is meant by contribution margin ? Calculate the contribution margin per unit for Biggy.

b) Calculate the break even point for Biggy in units and RM.

c) Due to the recent reduction of petrol price, the logistic manager has estimated a decrease of 20% of its delivery cost starting from August 2022. At the same time, the price of Biggy will also reduce to RM 110 per unit. Calculate the new break even point for Biggy in unit and RM.

d) Discuss how cost-volume-profit analysis could assist the management of Hohobag in making decisions.

20 marks