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A. Hasrita, the Finance Manager of Budibicara Sdn. Bhd. (BSB), prepared the following budgeted income statement for the coming year: RM Sales 456,500 Less:
A. Hasrita, the Finance Manager of Budibicara Sdn. Bhd. (BSB), prepared the following budgeted income statement for the coming year: RM Sales 456,500 Less: Total variable costs 333.245 Contribution Margin 123,255 Less: Total fixed costs Operating Income 71,280 51,975 REQUIRED: (a) (b) Compute BSB's variable cost ratio and contribution margin ratio. (2 Marks) Suppose BSB's actual revenues are RM33,000 more than budgeted. By how much will operating income increase? (Prepare your answer without preparing a new income statement). (2 Marks) (c) Determine the sales revenue BSB must earn in order to breakeven. (2 Marks) (d) Determine BSB's expected margin of safety. (2 Marks) (e) If sales revenue is RM418,000, state the new BSB's margin of safety. (2 Marks)
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