Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 4 Choco Sdn Bhd is one of the largest chocolate manufacturers in Malaysia. In early 2019, the company introduced new product: Hazel Tiramisu Chocolates.

image text in transcribed
QUESTION 4 Choco Sdn Bhd is one of the largest chocolate manufacturers in Malaysia. In early 2019, the company introduced new product: Hazel Tiramisu Chocolates. it proposed selling price is RM3.50 per unit. The following are cost incurred for each unit of Hazel tiramisu chocolate: Mr. Jamal, the president of the company was unhappy with the company's performance in 2019. He proposed three strategies to improve company's profit. The three possible strategies are: Item Cost (RM) Labour cos! 0.30 Tiramisu 0.40 Hazelnut 0.25 Sugar 0.20 Wrappers 0.10 Strategy 1 In order to do intensive promotion, Mr. Jamal planned to advertise the product in a cartoon movie. The fixed promotion cost is increased by RM100,000. It is estimated that the unit sales will increase by 50%. The company also incurred RM108,000 of annual fixed cost to produce the product. At the end of 2019, Choco Sdn Bhd reported sales of 140,000 units of this product. Strategy 2 Instead of implementing the intensive promotion, another plan is to improve the product quality. Mr. Jamal planned to buy high quality of Tiramisu chocolate which will increase the variable cost per unit by RM0.20. It is estimated that the unit sales will increase by 5%. Strategy 3 Another plan is to increase the selling price to RM4.50, but the unit variable cost is remain unchanged. However this action is expected to reduce the sales unit by 20%. b. Required: ..Compute unit contribution margin for the product. (4 marks) Calculate the break-even in units and sales value (RM) (3 marks) Determine the margin of safety in units and sales value (RM) in 2019, (3 marks) d. Calculate the current profit for Choco Sdn Bhd. (2 marks) C. Required: Calculate the net profit for each strategy that will be received by the company. (13 marks) (Total: 25 marks)

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_2

Step: 3

blur-text-image_3

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 Principles And Practice

Authors: Kumar And Sharma

3rd Edition

8120350987, 9788120350984

More Books

Students also viewed these Accounting questions

Question

1. Discuss the four components of language.

Answered: 1 week ago

Question

f. What stereotypes were reinforced in the commercials?

Answered: 1 week ago