Magical Toys Sdn. Bhd. sales slumped badly in 2018 due to so many people purchasing gifts online. The company's income statement showed the following results from selling 500,000 units of toys: net sales RM2,125,000; total costs and expenses RM2,500,000; and net loss RM375,000. Costs and expenses consist of the following:

	Total (RM)	Variable (RM)	Fixed (RM)
Cost of Goods Sold	2,000,000	1,300,000	700,000
Selling Expenses	200,000	50,000	150,000
Administrative expenses	300,000	150,000	150,000
Total	2,500,000	1,500,000	1,000,000

For the year 2019, the management of Magical Toys is considering purchasing new automated equipment. By operating this new equipment, the company is going to change the proportion between variable and fixed expenses to 45%:55%.

Required:

(a) Compute contribution margin and contribution margin ratio for the year 2018. (3 marks)

(b) Compute break-even sales for the year 2018. (1 marks)

(c) Should the management decide to proceed with its plan, compute the break-even sales for 2019. (6 marks)