Murni Berhad has two outstanding issues in its company. The first is an outstanding court case concerning a customer claiming damages for losses due to faulty components supplied by Murni. The estimated outcomes of a court case are 15% chance of no damages awarded, 60% chance of damages of RM2 million and 25% chance of damages of RM5 million. The second is the provision required for product warranty claims against 300,000 units of retail goods supplied with a one-year warranty. The estimated outcomes of warranty claims are 80% of sales will have no claim, 15% of sales will require a RM30 repair and 5% of sales will require a RM110 repair.

Required: Advise Murni Berhad on the amounts of provisions that should be recognized. (6