QUESTION 1 (20 MARKS: 36 MINUTES)

A. Currently, Happy Travel Sdn Bhd (HTSB) sells two (2) types of suitcase, namely: a carryon suitcase and a deluxe suitcase. The price and variable cost for each type of suitcase is listed below:

Suitcase Type Price (in RM) Variable Cost (in RM) Carry-on 180 40 Deluxe 300 120Items Costs Cloth (4 meters per dress) RM4.50 per meter Zip and button RM0.50 per set Lace RM1.50 per dress Production labor cost RM9.00 per dressRacket Ball Sales RM150.000 RM300.000 Cost of goods sold RM70,000 RM120.000 Advertising expenses RM32,000 RM75.000 Administrative expenses RM30,000 RM55.000 Average operating asset RM 75,000 RM150,000 Weighted average cost of capital 12% 12% Tax 15% 15%