Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 2 (25 MARKS) a. Apollo Sdn Bhd collects data relating to a mixed cost, using units produced as the activity level. Month August September

image text in transcribed

image text in transcribed

image text in transcribed

QUESTION 2 (25 MARKS) a. Apollo Sdn Bhd collects data relating to a mixed cost, using units produced as the activity level. Month August September October November December Units Produced 9,800 8,500 7,000 7,600 8,100 Total Cost (RM) 14,740 13,250 11,100 12,000 12,460 (i) Using the above data, calculate the variable cost and fixed cost elements using the high-low method. (4 marks) Should the company produces 10,000 units, what is the estimated total cost? (2 marks) b. The excerpt statement of comprehensive income for Ahmad Albab PLT for 2020 is shown below: (BTMP 1533) CONFIDENTIAL AHMAD ALBAB PLT Statement of Comprehensive Income for year ended December 31, 2020 RM Sales (240,000 units) 1,200,000 Cost of goods sold 800.000 Gross profit 400,000 Operating expenses: Selling 280,000 Administrative 150,000 430.000 Net loss (30,000) Management accountant has provided additional information on cost behaviour. Analysis shows that variable cost elements are 75% of the cost of goods sold, 42% of the selling expenses and 40% of the administrative expenses respectively. Required: (Note: Round quantity to nearest unit, Ringgit Malaysia to two decimal places and percentage where necessary. Use the CVP income statement format to calculate profits.) (i) Calculate breakeven point in Ringgit Malaysia and in units for year 2020. (6 marks) Abu suggested to the management a plan to reduce losses and make profit. Among them is to improve quality of the product substantially by spending 25 sen more per unit on better raw materials. Due to stiff competition, the company can only increase selling price per unit to only RM5.25. Moreover, he estimates that sales volume will increase by 25%. From the above suggestions, calculate the effect of the new plan on the profits and the breakeven point in Ringgit Malaysia. (6 marks) (BTMP 1533) CONFIDENTIAL (ii) Hassan graduated from marketing degree in Faculty of Technology Management and Technopreneurship (FPTT), Universiti Teknikal Malaysia Melaka (UTeM). As a marketer, he strongly believes in the marketing power to increase sales. He proposed an alternative plan to Ahmad's: increase variable selling expenses to 59 sen per unit, lower the selling price per unit by 25 sen, and increase fixed selling expenses by RM40,000. From recent marketing report, Hassan was interested on the statement which said that sales volume would increase by 60% if these changes were made. Considering this plan was executed, calculate new profits and the breakeven point in Ringgit Malaysia of the company, (6 marks) iv) Which plan should be accepted? Briefly justify your reason. (1 mark)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Accounting Cases Investigating Issues Of Fraud And Professional Ethics

Authors: Jay Thibodeau, Deborah Freier

3rd Edition

0078110815, 9780078110818

More Books

Students also viewed these Accounting questions

Question

List the common methods used in selecting human resources. page 254

Answered: 1 week ago