Answer question 1 until question 5

EXERCISE 9: COST VOLUME PROFIT ANALYSIS Kopi Sedap Sdn Bhd is the exclusive wholesale distributor of the 'Kopi Pak Belalang' manufactured in one of the industrial areas in Johor. The coffee is sold in individual packets at RM6.00 each. In developing the company's financial strategy for the year 2015, the company's manager has accumulated all data on projected operation as follows: Expected sales volume 300,000 packets per annum Variable cost: cost of coffee RM 2.00 per packet cost of labour selling and distribution administrative variable cost other variable cost Fixed cost: RM 1.00 per packet RM 0.50 per packet RM 0.05 per packet RM 0.12 per packet administrative expenses RM 135,000 per annum other overhead expenses RM 54,000 per annum You are required to analyze the following independently (limit your answer to two decimal places): 1. Calculate the following: i. Contribution margin in Unit and ratio. ii. Break-even point in packet (unit) and value (RM) iii. Total net profit for the year iv. Safety margin in packet and value (RM) 2. It is estimated that the cost of coffee will increase by 5% and the total fixed costs is expected to increase by RM 20,000. i. What would be the new selling price if the company wants to maintain the original net profit? Assume that sales volume and other data remain the same. ii. If the selling price remains at RM 6.00 per packet, what will the new break-even point and margin of safety in packet and value (RM) be? Assume sales volume remains the same as before. 3. The manager has decided to reduce the advertising cost by RM 10,000. The main supplier of the coffee has agreed to further discount the cost of coffee by 10% per packet. Calculate the company's new net profit if other data remain the same. 4. Calculate the magnitude (degree) of operating leverage of Kopi Pak Belalang. 5. If Kopi Pak Belalang increases sales by 15%, discuss the effect to the profitability of Kopi Sedap Sdn Bhd based on Q4