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Question 1 ACE Company manufactures and sells a single product which is a soft toy for children. The relevant information is provided below: Manufacturing

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Question 1 ACE Company manufactures and sells a single product which is a soft toy for children. The relevant information is provided below: Manufacturing costs: RM Direct materials cost per unit 25 Direct labour cost per unit 15 Variable overhead cost per unit 28 Fixed overhead cost in total 45,000 Selling expenses: Variable selling expenses per unit Fixed selling expenses in total 12 18,000 The selling price of each unit of soft toy is RM120 Required: a. Calculate the contribution margin per unit and contribution margin ratio. b. Calculate the break-even point in unit and in Ringgit Malaysia (RM). (4 marks) (4 marks) c. What is the total units that must be sold by the company to earn a profit of RM125,000? (4 marks) d. Assume that the company managed to sell 3,200 units, calculate the profit of the company. (5 marks) e. Compute a new break-even point (unit and RM) if the company decided to increase the selling price by 15% and an increase in additional fixed selling expenses by RM14,000. (8 marks) (Total: 25 Marks)

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