An organisation produces one product. The cost per unit of that product is proposed to be as

follow:

Variable costs:

Production RM$7\mathrm{.}20/$unit

Non$-$production $,10\%$ of selling price per unit

Fixed production costs $,$ RM$692,800$

Fixed selling and disribution costs RM$200,000$

Selling price

RM$24/$unit

Sales

$90,000$ units

You are required to:

$($a$)$ Calculate the followings based on above information:

$($i$)\frac{C}{S}$ ratio;

$($ii$)$ Breakeven point $($units$)$;

$($iii$)$ Profit earned; and

$($iv$)$ Sales required $($units$)$ in order to generate a profit of RM$806,400.$

$($b$)$ The company proposes to increase the variable production costs to RM$9\mathrm{.}00/$unit

and the total fixed costs by RM$27,000,$ whilst its selling price per unit and the

variable non$-$production cost per unit remain unchanged, calculate the followings:

$($i$)$ New C$/$S ratio; and

$($ii$)$ New Breakeven point $($units$).$

$($c$)($i$)$ Based on your answer in $($a$)($ii$),$ state at what sales unit the company

will start to earn profit.

$($ii$)$ State whether you would choose a higher or lower $\frac{C}{S}$ ratios for the

company and based on your choice, explain whether the chosen

C$/$S ratio will give rise to a higher or lower break$-$even point.

$($B$)(7$ marks$)$

Happy Bhd makes and sells two $(2)$ products, which has the following information:

Labour hours are limited to $1,100$ hours each period and the supply of material is limited

to $1,000kg$ each period.

You are required to:

$($a$)$ Calculate the followings based on the maximum demand for each of the products:

$($i$)$ Direct labour hours required for each of the products; and

$($ii$)$ Material required for each of the products.

$($b$)$ Determine whether the labour hour or the material is the limiting factor

for the company, showing the surplus or shortfall for both the labour and

the material.