Abby's Cookies Sdn Bhd is a company which produces and sells cookies called "Mint

Cookies". Each tin of Mint Cookies consists of 500 grams of cookies which is sold at a price

of RM50. Market research shows that the company could sell at least 15,000 tin per year.

Expected costs and revenues at expected sales of 15,000 tins are given below.

RM

Cost of goods sold

475,000

General and administrative expenses 45,000

Selling and distribution expenses

37,500

Sales revenue

750,000

The cost of goods sold consists of RM300,000 variable and RM175,000 fixed. All general

and administrative expenses are fixed costs. Meanwhile, selling and distribution expenses

consist of RM30,000 variable and the remaining is fixed cost.

REQUIRED:

Can the company break even at a sales level of 15,000 tins? Explain your answer