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Question 2 A company manufactures a single product which it currently sells for RM10 per unit and the following information relates to the performance last
Question 2 A company manufactures a single product which it currently sells for RM10 per unit and the following information relates to the performance last quarter. If the selling price is increased to RM11 per unit, sales are estimated to fall to 5,000 units in the period, with no change in unit variable costs or total fixed costs. Required: (a) Compute the breakeven point in units for the last quarter. ( 3 marks) (b) Compute the breakeven in RM using the contribution margin ratio approach (c) If the selling price is increased to RM11 per unit for the next quarter, calculate the breakeven point and the margin of safety, both in units. Explain briefly about margin of safety. (10 marks) (d) If the selling price remains at RM10 per unit, calculate the sales volume (units) that would be required to achieve a profit of RM10,000 in the period. ( 3 marks) (e) State any THREE (3) assumptions used in cost-volume-profit analysis. (6 marks) (Total 25 marks)
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