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Question 1 Megatrom Tech is a computer game manufacturer. It produces two games; Alien Predators and Clash Royal. The following information was extracted from its
Question 1 Megatrom Tech is a computer game manufacturer. It produces two games; "Alien Predators" and "Clash Royal". The following information was extracted from its books for the year ended 31 December 2018: Alien Predators Clash Royal Sales revenue RM2,400,000 RM3,750,000 Variable manufacturing costs RM800,000 RM1,500,000 Variable selling costs RM350,000 RM450,000 Units sold 10,000 units 15,000 units Fixed manufacturing costs Fixed selling costs RM1,800,000 RM450,000 Required: 1. Prepare a contribution income statement of Megatrom for the year ended 31 December 2018. 2. Calculate the break-even units and sales for each game. 3. Calculate the required units of games (in total) at the assumed sales mix if Megatrom desires a profit of RM500,000? 4. Suppose the company sold a total of 25,000 games in 2018, of which only 10,000 units were Clash Royal. With the change in sales mix, a. calculate the net operating income of Megatrom for 2018. b. calculate the break-even units of Alien Predators and Clash Royal. C. compare your answers in (a) and (b) with the original sales mix (calculated in Requirement 1 and 2). Are the amounts different? Why or why not? 5. Refer to original data. Calculate the degree of operating leverage for 2018. Briefly explain your answer. Question 2
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