find ( a - b )

AL 22 MARKS QUESTION 3 Best Gift Manufacturing's sales slumped badly in 2020 due to the unexpected pandemic and movement control order, thus so many customers shift purchasing method to online. The company's income statement showed the following results from selling 500,000 units of product: net sales RM2, 125,000; total costs and expenses RM2,500,000; and net loss RM375,000. Costs and expenses consisted of the following: Total Variable Fixed Cost of goods sold RM2,000,000 RM1,300,000 RM700,000 Selling expenses 200,000 50,000 150,000 Administrative expenses 300,000 150,000 150,000 RM2,500,000 RM1,500,000 RM1,000,000 Management is considering the following alternative for year 2020: Purchase new automated equipment to manage online business operation that will change the proportion between variable and fixed expenses to 45% variable and 55% fixed. Instructions: (a) Compute the break-even point in dollars for 2020. (9 marks) (b) Compute the break-even point in dollars under the alternative course of action. (9 marks) [TOTAL 18 MARKSI