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Q2 Deskjet Company sells car safety products in Kuala Lumpur. The company's salespersons are paid basic salary plus a commission of RM 20 on each
Q2 Deskjet Company sells car safety products in Kuala Lumpur. The company's salespersons are paid basic salary plus a commission of RM 20 on each sale made by them. The selling price and expenses data as per Table Q2: Table Q2: Selling Price and Expense Data for Desket Company Items Selling price per product RM 100 Variable expenses per product: Invoice cost Sales commission Total variable expenses 50 20 70 Annual fixed expenses: Rent Marketing Salaries Total fixed expenses 55,000 68,000 100,000 318,000 (a) Determine the break-even point in units and RM. (3 marks) (b) Based on your calculations in Q2(a), illustrate a Cost-Volume-Profit graph. (4 marks) (c) Calculate the net operating income if the company sells 20,000 car safety products in a year. (5 marks) (d) Determine the break-even point in units and RM, if commission is entirely eliminated and salaries are increased by RM70,000. (3 marks) (e) Compute the break-even point in units and RM, if the salesperson is paid an additional commission of RM10 on top of the pre-existing commission. (3 marks) (f) As an alternative to Q2(c), Deskjet Company is planning to pay RM10 commission to the manager on each product sold in excess of break-even point. Calculate the effect of these changes on the net operating income or loss of the Deskjet Company if 30,000 products are sold in a year. (6 marks)
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