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Question 5 20 Marks Golden Mountain Company manufactures a ketchup and it sells for Rm 30 per unit. Total fixed cost related to ketchup
Question 5 20 Marks Golden Mountain Company manufactures a ketchup and it sells for Rm 30 per unit. Total fixed cost related to ketchup are RM30, 000 per month and variable cost involved in manufacturing this product are Rm 18 per unit. Monthly sales units are 10,000 ketchup. However the general manager want to suggest 2 ways to increase the sales and make a better profit as per followed: a) If commission on sales marketing expenditures increase by $15,000, sales are expected to increase by 70000 units. b) A price increase from Rm30 to Rm40 per unit will increase sales up to 90000 units. Calculate the operating income and propose for the best suggestion.
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