Q2 Sangkar Biru Sdn Bhd makes small bird houses that sells at RM32.00 each. The company's level of production and sales is 145,000 units. The company has a pre-tax income of RM1,620,450. In addition to RM530,500 of fixed manufacturing overhead and RM169,050 of fixed administrative expenses, the following per unit costs as in Table Q2 have been determined for each bird house. Table Q2: Cost Information for One Unit Bird House Amount Cost Item (RM) Direct material 8.00 Direct labour 4.00 Variable manufacturing overhead 1.80 Variable selling expense 2.20 Total variable cost 16.00 Calculate the break even point in units of the bird houses. Determine Sangkar Biru's margin of safety. in units. (a) (b) (i) (ii) in percentage. (c) Compute: (i) The company's degree of operating leverage. (4 marks) (4 marks) (3 marks) (ii) The percentage of increase in income when sales increase by 20 percent. (2 marks) CONFIDENTIAL (d) 3 BPA 11403 CONFIDENTIAL The company has received an offer from a Singaporean company to buy 6,000 bird houses at RM28.00 per unit. The new per unit variable selling cost of the additional units will be RM3.00, and RM24,000 of fixed administrative cost will be incurred. The sale would not affect the domestic sales or their cost. Analyse whether Sangkar Biru should accept this offer. (12 marks)