Answer ALL questions (40 MARKS) QUESTION 1 In January, Aliba Enterprise sold a capacitor to its distributors for RM 300 per capacitor. The sales level of 4,000 capacitors per month was less than the single-shift capacity of 5,500 capacitors at its plant located in Kuala Lumpur. Variable production cost was RM150 per capacitor, and fixed production cost was RM300,000 per month. In addition, variable selling and distribution costs are RM 30 capacitor and fixed selling and distribution costs are RM60,000 per month. At the suggestion of the marketing department, in February, Aliba reduced the sales price to RM250 and increased the monthly advertising budget by RM11,000. Sales are expected to increase to 10,000 capacitors per month. If the demand exceeds the single shift capacity of 5,500 capacitors, the plant needs to operate in two shifts. Two shift operations will increase monthly fixed production costs to RM454,000 Required: a) Determine the contribution margin per capacitor in January (4 Marks) b) Determine the sales level in a number of capacitors at which the profit-to- sales ratio would be 20% for the January. (5 Marks) c) Determine the breakeven points for the single-shift operation and double- shift operation for the month of February. (4 Marks) d) Determine the sales level in a number of capacitors at which the profit-to- sales ratio of February is the same as the profit-to-sales ratio in January. (7 Marks) (TOTAL: 20 Marks) QUESTION 2 The manufacturing capacity of Asani Bhd's plant facility is 60,000 rotators per quarter. Operating results for the first quarter of this are as follows. RM Sales (36,000 units at RM10) 360,000 Variable manufacturing and selling costs 198,000 Contribution margin 162,000 Fixed costs 99,000 Operating Income 63,000 A foreign distributor has offered to buy 30,000 units at RM9 per unit during the second quarter of this year. Domestic demand is expected to remain the same as in the first quarter Required: a) Determine the impact on operating income if Asani Bhd accepts this order. (6 Marks) b) Assume that if the company accepts the order, it forgoes sales to regular domestic customers. Analise the other considerations which are relevant for this decision. (4 Marks) c) Assume the Asani Bhd to run an extra shift so that it can accept the foreign order without forgoing sales to its regular domestic customers. The proposed extra shift would increase capacity by 25% and increase fixed costs by RM25,000. Determine the impact on operating income if Asani Bhd operates the extra shift and accept the export order. (10 Marks) (TOTAL: 20 Marks)