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Question 1 (Total: 25 marks) Meranti Sdn Bhd has analysed the costs of producing and selling 5,000 units of its only product to be :

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Question 1 (Total: 25 marks) Meranti Sdn Bhd has analysed the costs of producing and selling 5,000 units of its only product to be : RM Direct materials 60,000 Direct labour 40,000 Variable factory overhead 20,000 Fixed factory overhead 30,000 Variable marketing and administrative expenses 10,000 Fixed marketing and administrative expenses 15,000 Required: a) Calculate the number of units needed to break even at a per unit sales price of RM38.50. (2 marks) b) Calculate the number of units that must be sold to produce a RM18,000 profit, at a RM40 per unit sales price. (2 marks) c) Determine the price Meranti must charge at a 5,000 unit sales level, to produce a profit equal to 20% of sales. (2 marks) d) Discuss on the statement CVP analysis is so simplistic that no company would make a decision based on CVP alone". (9 marks) e) A typical cost-volume-profit graph assumes profit continually increases as volume increases. Demonstrate the factors that might prevent continued profits as volume increases and explain why (10 marks)

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