d) Referring to the original data, the company has decided to improve its profitability for the month of July 2022 and has come with two options: MANAGERIAL AND COST ACCOUNTING 2/10CONFIDENTIAL Option 1:The company is considering purchasing a new oven which cost RM30,000. The oven has an expected useful life of 5 years with no residual value. This will increase the production of egg tarts by 10% and selling price per box by 5%. Other cost data remain the same.Option 2:Spend an additional RM2,000 for advertisement and this will increase the selling price to RM12 per box. The company will produce and sell 12,000 cups of egg tarts. A new flavour of material will be used and this will increase the direct material cost by 8%. Other cost data remain unchanged.Advice Canyon Sdn. Bhd. as to which option will be preferred to improve its profitability for the month of July 2022.(11 marks)

Question 1 Canyon Son. Bhd. produces and sells egg tarts that are packed in a box. Each box comprises of six cups of egg tarts. The following data is available for the month June 2022: RM Selling price per box 10.50 Variable costs for the month: Direct material 4,250 Direct labour 2,890 Production overhead 2,550 Selling overhead 2,040 Annual fixed costs 24,000 Estimated egg tarts to produce and sell in the month of June 2022 are 10,200 cups. Required: (a) Determine the break-even point in number of boxes and value for the month of June 2022. (6 marks) (b) Calculate the selling price per box if the company wants to produce and sell 18,000 cups of egg tarts in June 2022 and achieve a desired net profit of RM25,000. (4 marks) (c) Compute the margin of safety (MOS) in units and value for Canyon Son Bhd. (4 marks)