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please solve it.tq QUESTION 3 PART A Dawood Sdn. Bhd. manufactures tyres. The company has a standard tyre that sells for RM25 each. At present,
please solve it.tq
QUESTION 3 PART A Dawood Sdn. Bhd. manufactures tyres. The company has a standard tyre that sells for RM25 each. At present, the standard tyre is manufactured in a small plant that relies heavily on direct labour workers. Thus, variable costs are high, totaling RM15 per tyre. Last year, the company sold 30,000 standard tyres, with the following results: RM Sales (30,000 standard tyres) 750,000 Less: variable expenses 450,000 Contribution margin Less: fixed expenses 300,000 210,000 Net income 90,000 Required: a) Indicate the contribution margin ratio and the break-even point in units. (2 marks) b) Due to an increase in labour rates, the company estimates that the labour costs will increase by RM3 per tyre next year. If this change takes place and the selling price per tyre remain constant at RM25 each, indicate the new contribution margin ratio and break-even point in units. (2 marks) c) Refer to data (6) above. If the expected change in variable costs take place, how many tyres will have to be sold next year to earn the same net income (RM90,000) as last year? (3 marks) d) Refer again to the data in (b) above. The president feel that the company must raise the selling price on the standard tyres. If the company wants to maintain the same contribution margin ratio as last year, calculate the selling price per tyre must it charge next year to cover the increased labour costsStep by Step Solution
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