Question E1

Kinder Soaps Sdn. Bhd. is planning to launch its new soap, The Main Event, in Malaysia for 2022. Based on the current market condition, the factory plans to produce 80,000 pieces with which the volumes occupy 80% of the existing capacity. The new soap is sold for RM20 each piece. The fixed costs consist of fixed production costs RM 150,000 and fixed selling expenses RM 200,000. The variable costs consist of direct materials RM6, direct labor RM3, and variable factory overheads RM3, and variable selling expenses RM3. The relevant range is expected between 50,000 and 120,000 pieces.

Required: Mark is rewarded only when there is working for each of your answers. Consider each question SEPERATELY.

(i) Calculate the break-even point in units and value. (3 marks)

2. Sketch a traditional break-even chart with all relevant labels. (3 marks)
3. Calculate the number of pieces of soaps if factory expects to make a profit

of RM75,000. (3 marks)

4. Calculate the profit that could be expected if the factory operated at

80% of capacity. (3 marks)

5. Calculate the break-even point in pieces if the total fixed costs increased by

15% and selling price increased by 10%. (3 marks)

6. Calculate the margin of safety in units and value if demand reaches the

80% of companys capacity. (3 marks)

7. Calculate the expected profit if the factory operates at 100% of capacity. (3 marks)
8. If the factory operates at 100% of capacity, fixed production costs decreased

by RM50,000 variable costs (in total) is reduced by 10%, profit is expected to

be RM95,000. Calculate the new selling price per piece.