Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Managers often have some latitude in trading off between the variable cost and fixed cost. Provide your suggestion to the manger in deciding which

    

Managers often have some latitude in trading off between the variable cost and fixed cost. Provide your suggestion to the manger in deciding which is the best cost structure. (6 marks) (CLO3, PLO5, C3) c. The Alia B Enteprise operates a chain of wedding's shoe shops that carry many styles. One of the products called Ixora. The following data pertains to Exora: b. Selling price Variable expenses Direct material Direct labour Sales commission Total variable cost Fixed expenses Advertising Rent Salaries Total fixed expenses Per pair RM 120 RM 45 RM 9 RM 18 RM 72 Annual RM 120,000 RM 80,000 RM 400,000 RM 600,000 The company currently sells 11,500 units of its products. Required: i. Calculate the breakeven point in units and in value. ii. Calculate the margin of safety in units and in value. (4 marks) (CLO3, PLO5, C3) (3 marks) (CLO3. PLO5, C3) iii. Calculate the profit if the company is considering paying to the store manager an incentive commission of RM 2 per pair of shoes (in addition to the sales person commission). (4 marks) (CLO3, PLO5, C3) iv. Calculate the new breakeven point in units and value if the company considering eliminating sales commission entirely and increasing the fixed salaries by RM 40,500. Would you recommend that the change be made? **END OF QUESTION** (5 marks) (CLO3, PLO5, C3)

Step by Step Solution

3.39 Rating (161 Votes )

There are 3 Steps involved in it

Step: 1

SOLUTION As a manager I would recommend the following cost structure for the Alia B Enterprise 1 Variable cost structure a Direct material cost RM 45 ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Managerial Accounting Concepts

Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds

8th edition

978-1259569197

More Books

Students also viewed these Accounting questions