Question $3$

Great Sdn Bhd $($GSB$)$ produces a single product that is priced at RM$120$ per unit. The costs of its operation for $2008$ are as follows:

RM

Cost per unit of product: Direct material $30$

Direct labor $24$

Variable production overhead $6$

Selling and distribution $1\mathrm{.}35$

Fixed overhead $($based on production and sales of $1,500$ units$)$

Production overhead $19,800$

Selling and distribution

Required: $12,600$

a$)$ Calculate the contribution sales ratio.

b$)$ Calculate GSB$$s break$-$even points $($in units and in RM$).$

c$)$ How many units would GSB have to sell to earn a net profit of RM$80,000?$

$(3$ marks$)$

$(3$ marks$)$

$(4$ marks$)$

d$)$ Calculate GSB$$s margin of safety $($in units and in RM$).$

$(2$ marks$)$

e$)$ After the data was collected, the new director realized that manufacturers had increased the production overhead by $25\%$ for the next year due to an increase in the price of a type of raw material for making the product. Calculate the new break$-$even points in units and in RM$.$