Dear tutors, this is my 1st time taking accountings and would love for you to guide me on related questions like this. I will study your formats to further improve my understanding. thank you!

Question 1

Kipas Sdn Bhd produces ceiling fans, and is currently operating at 95% of its capacity of 100,000 fans per month. The company has just received a one-time special order from Hong Kong Trading to purchase 5,000 fans at RM110 per unit. If Kipas choose to accept this order, it has to incur an additional fixed printing cost of RM50,000 for the packaging material. The data provided is as follows:

Monthly Data

Units produced and sold

95,000

Normal selling price/unit

RM150

Variable cost/unit

RM80

Total fixed cost

RM3,500,000

Question: Assuming that Kipas has rejected the special order. Calculate the breakeven point in unit and RM for current normal sales (excluding the special order). What is the profit that Kipas is currently earning from normal sales?

(6 marks)