OBJECTIVE: ToenablelearnerstoutilisetheCostVolumeProfitanalysisinmakinginformeddecisionsandcosteffectiveactionsrelatedtotheproductsorservicesthebusinesssells. REQUIREMENT:CostVolumeprofitanalysisQuestion Dalila Manufacturing Berhad (DMB) is suffering from the global economic effects for itsmain product. The product is sold in supermarkets throughout Malaysia.
OBJECTIVE: ToenablelearnerstoutilisetheCostVolumeProfitanalysisinmakinginformeddecisionsandcosteffectiveactionsrelatedtotheproductsorservicesthebusinesssells. REQUIREMENT:CostVolumeprofitanalysisQuestion Dalila Manufacturing Berhad (DMB) is suffering from the global economic effects for itsmain product. The product is sold in supermarkets throughout Malaysia. The following tableshowstheresultsofDMB'soperationsfor2021. Required: (a) ComputeDMB'sbreakevenpointinbothunitsand$. (2marks) (b) Whatwouldbetherequiredsales,inunitsandin$,togenerateapretaxprofitof$30,000? (3marks) (c) Assume an income tax rate of 30%, what would be the required sales volume inbothunitsand$. 4 (3marks) (d) Prepareacontributionincomestatementshowingthepretaxandaftertaxincomeaspertherequirementabove. (4marks) (e) The manager believes that a $60,000 increase in advertising would result inapproximately a $200,000 increase in annual sales. If the manager is right, whatwilltheeffectonthecompany'soperatingprofitorloss? (4marks) (f) Refer to the original data. The vice president in charge of sales feels that a 10%reductioninpriceincombinationwitha$40,000increaseinadvertisingwillcauseunitsales to increase by 25%.Whateffectwould this strategyhave onoperatingprofit(loss)? (6marks)
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