Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Frewer Sports Sdn. Bhd. is planning to launch its new sport drink, The New Revive, in Malaysia for 2023. Based on the current market condition,
Frewer Sports Sdn. Bhd. is planning to launch its new sport drink, The New Revive, in Malaysia for 2023. Based on the current market condition, the factory plans to produce 700,000 bottles with which the volumes occupy 70% of the existing capacity. The new sport drink is sold for RM2 each bottle. The fixed costs consist of fixed production costs RM180,000 and fixed selling expenses RM70,000. The variable costs consist of direct materials RM0.50, direct labor RM0.40, and variable factory overheads RM0.10, and variable selling expenses RM0.50. Required: Mark is rewarded only when there is working for each of your answers. (i) Calculate the break-even point in units. (ii) profit Calculate the number of bottles of sport drinks if factory expects to make a of RM20,000. (iii) Calculate the profit that could be expected if the factory operated at 80% of capacity. (iv) Calculate the break-even point in pieces if the total fixed costs increased by 20% and selling price increased by 10%. (v) Calculate the margin of safety in units if demand reaches the 70% of company's capacity. (vi) Calculate the number of bottles must be sold to earn an after-tax profit equal to RM30,000. Assume the tax rate is 25%. (vii) If the factory operates at 50% of capacity, fixed production costs decreased by RM30,000, variable costs (in total) is reduced by 10%, profit is expected to be RM30,000, Calculate the new selling price per piece
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started