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Beauty Sdn. Bhd. is a cosmetics company. They produced and sell cream lipstick since 2016. On average they are able to sell 950 units of
Beauty Sdn. Bhd. is a cosmetics company. They produced and sell cream lipstick since 2016. On average they are able to sell 950 units of lipstick per annum at selling price of RM200 per unit. The following data is related to the product. RM Variable cost per unit: Direct material Direct labor Production overhead Selling overhead Total Annual fixed cost: Production overhead General and administration 53 200 22 050 16 000 91 250 Total Required: (a) Calculate the following: I. Break-even point in unit and value and Margin of safety in units and value and Net profit earned by the company. (b) Calculate the number of lipsticks to produce and sell by the company if desired profit is set to be RM135 000 for the year. (c) Assume if the company increase their annual fixed cost and variable cost by 10% and 15% respectively, which will be expecting an increase in sales level to 1 100 units. Calculate the new net profit that the company will earn if the changes be made. (d) The management of Beauty Sdn. Bhd. decides to use quality material in the manufacture of their product, which will increase the material cost by RM15 per unit and transportation cost of RM4,000. The manager predicts that an increase in these costs will lead to better product quality which it helps to increase the sales to 1 600 units. Should the change be made
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