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Help me solve this question: QUESTION 3 Pentax Company is operating in almost 100% capacity. The company expects sales to increase by 40% in 2022.
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QUESTION 3 Pentax Company is operating in almost 100% capacity. The company expects sales to increase by 40% in 2022. To satisfy the demand for its products, the company is considered two alternatives: i . The first alternative would increase fixed costs by 30% but not affect variable costs ii. The second alternative would not affect fixed costs but would increase variable costs to 70% of the existing selling price of the company's product. Pentax Company's income statement for 2021 is as follows: RM RM Sales (100,000 units) 3600,000 Costs: Variables 1600,000 Fixed 330,000 1930,000 Income before taxes 1670,000 REQUIRED: a. Determine the break-even point in sales Ringgit Malaysia for 2022 under the first alternative. b Determine the break-even point in sales Ringgit Malaysia for 2022 under the second alternative. Determine projected income before taxes for 2022 under each of the alternatives. d. Which alternative would you recommend? WhyStep by Step Solution
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