he company is planning to introduce a new vase, Celica of which the selling price and variable cost of RM85.00 and RM45.00 respectively. The proposed production of Celica is 3,000 vases monthly and the sales mix of the Flora and Celica is planned at 60% (Floral) and 40% (Celica). The introduction of Celica in the market resulted the fixed cost increased by RM15,000.

(i) Table showing cumulative profit for Flora and Celica.

Product	Sales Volume	Cumulative Sales Volume	Total Contribution	Cumulative Contribution	Cumulative Profit
Flora	2,000	2,000	5,900	5,900	(1,500)
Celica	3,000	5,000	120,000	123,900	105,000

(ii) Indicate the BEP (In units) on the chart drawn.

	Flora	Celica
Sales	2,000	3,000
Sales Mix	60%	40%
Sales Price	50.2	85
Variable Cost per unit	47.25	45
Contribution per unit	2.95	40
Total Fixed Cost	20,900

Therefore, weighted contribution margin; (0.6 x 2.95) + (0.4 x 40) = RM 17.77

Thus, Break Even Point in units; 20,900/25.18 = 830 unit.

BEP (in Unit)	=	Fixed Cost
		Unit Contribution Margin
	=	20,900
		17.77
	=	1,176 units

Required

(a) Advise company the options available in setting up the selling price of these two vases. (5 Marks).