Question
Arina Carpert Expert produces TWO (2) types of carpet cleaners, the Shiny and Smoother. The data for both of the two machines is as follows:
Arina Carpert Expert produces TWO (2) types of carpet cleaners, the Shiny and Smoother. The data for both of the two machines is as follows: Product Units Sold Unit Selling Price (RM) Unit Variable Cost (RM) Sales Mix Shiny 18,000 80 65 80% Smoother 4,500 140 100 20% Total fixed costs to manufacture both products are RM400,000 per year. Required: a) Calculate the breakeven point in units for each product, assuming the sales mix remains constant. (7 marks) b) Determine how many units of each product would be sold if Arina Carpet Expert expected a before-tax net profit of RM40,000. (4 marks) c) Determine the safety margin of each product and explain the meanings of the figures that you calculate. (4 marks)
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