QUESTION 2 (25 Marks) Redang Agroternak Sdn. Bhd. (Redang Agroternak), produces a product named as Bajee. The results of the company's operations for a typical month are summarized in contribution format as follows: RM Sales 5,400,000 Variable Expenses 3,600,000 Contribution Margin 1,800,000 Fixed Expenses 1,200,000 Net Profit 600,000 The company produced and sold 1,200,000 units of product during the month. There were no beginning or ending inventories. Required a) Based on the above situation, compute; i. The break-even sales in units. (3 marks) ii. The break-even sales in Ringgit. (2 marks) iii. The sales in units that would be required to produce net operating income of RM900,000. (3 marks) iv. The margin of safety in Ringgit. (2 marks) b) An important part of processing is performed by a machine that is currently being leased for RM200,000 per month. Redang Agroternak has been offered an arrangement (Royal Plan) whereby it would pay RMO.10 royalty per units processed by the machine rather than the monthly leas. i. Prepare the contribution margin income statement to compute the net income under the Royalty Plan. Should the company choose the lease or the Royalty Plan? (5 marks) ii. Under the Royalty Plan compute break-even point in units (2 marks) iii. Under the Royalty Plan compute break-even point in Ringgit. (2 marks) iv. Under the Royalty Plan determine the sales in units that would be required to produce net operating income of RM900,000. (2 marks) Explain TWO (2) important uses of Cost-Volume-Profit analysis to the business. (4 marks) END OF QUESTION PAPER c)