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Mak Mah Sdn Bhd (MMSB) produces a single product that sells for RM500. Cost per unit: direct material RM70, direct labour cost RM50, variable

 


Mak Mah Sdn Bhd (MMSB) produces a single product that sells for RM500. Cost per unit: direct material RM70, direct labour cost RM50, variable packaging cost RM30, variable marketing RM20 and variable selling costs RM30. Fixed costs are RM300,000 per annum. Required: a) Calculate contribution margin ratio. b) Calculate break even in unit and in sales. (5 marks) (5 marks) c) Calculate number of units to be sold to achieve a profit of RM400,000 per annum. (5 marks) d) Calculate number of units to be sold to achieve a profit of RM500,000 per annum (after tax) with a tax rate of 20% (in units). (5 marks) e) Suppose management believes that a RM90,000 increase in the monthly advertising expense will result in a considerable increase in sales. By how much sales needed to be increased to justify this additional expenditure?

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