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Fruity Company manufactures and sells a single product. The following budgeted information is available for a period: Selling price Direct materials Direct labour Variable overheads
Fruity Company manufactures and sells a single product. The following budgeted information is available for a period: Selling price Direct materials Direct labour Variable overheads Fixed factory overheads Fixed selling costs RM350 per unit RM180 per unit RM.50 per unit RM 15 per unit RM479.500 per year RM239.260 per year REQUIRED: (a) Calculate the contribution per unit and contribution/sales ratio. (b) Calculate the break-even point expressed in amount of sales and in unit. (C) Calculate the units that must be sold to earn a profit of RM189,000. (d) Calculate the margin of safety in units and the margin of safety (as a % of the budget sales) if the budgeted sales are 8,000 units. (e) Explain the term Margin of safety" and the result you obtained in (d) above
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