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please do Question e & f only Time Connection Sdn Bhd produces modern watches. It usually comes with a gift box that is suitable for
please do Question e & f only
Time Connection Sdn Bhd produces modern watches. It usually comes with a gift box that is suitable for any event or occasion. The following data is available for the month of January 2020: RM Selling price per unit 160.00 Variable costs per unit: Direct material 50.00 Direct labour 20.00 Manufacturing overhead 5.00 Packaging cost 5.00 Annual fixed cost Administrative overhead 78,000.00 670,000.00 Manufacturing overhead Selling and distribution overhead 50,000.00 10,000 unit of modern watches were produced and sold in the month of January 2020. The company also incurred variable cost of RM 4.00 per unit to sell and distribute products to its customers. Required: a. Explain briefly the concept of breakeven point and margin of safety. (4 marks) b. Calculate the breakeven point in units and in RM value for the month of January 2020. (4 marks) C. Compute the margin of safety in units and in value for the month of January 2020. (2 marks) d. Compute the total sales in value (in RM) of the company if it plans to earn profits of RM 95,000 for the month of January 2020. (3 marks) e. For February 2020, the company plans to modify the gift box. The company may incurred additional cost of RM5.00 per box. In addition, the company also expected the administrative overhead to increase by RM5,000 per month and the sales volume expected to increase by 20%. All other costs remain unchanged. Based on the new information of the costs, calculate the followings: i. The new breakeven point in unit (round up your answer to the nearest unit) ii. The new breakeven point in RM value iii. The new net profit or loss (6 marks) f. Due to recession, the company expected that the material costs and labour costs would increase by 10% and 5% respectively. By ignoring the information in part (e), calculate the number of modern watches the company should sell in order to earn a profit of RM 40,000. (Round up your answer to the nearest unit) (4 marks) (Total: 23 marks)Step by Step Solution
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