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Question HIHI Sdn. Bhd. manufactures and sells three types of products, namely P1, P2 and P3. The cost accountant has prepared the budgeted cost information

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Question HIHI Sdn. Bhd. manufactures and sells three types of products, namely P1, P2 and P3. The cost accountant has prepared the budgeted cost information of the three products for the year 2022 as follows: PI (RM) 800 P2 (RM) 900 P3 (RM) 700 Selling price Cost per unit: Prime cost Variable production overheads Fixed production overheads Variable selling overheads 420 50 100 20 540 70 90 30 275 35 70 10 I Sales volume (units) Sales mix percentage 10.080 40% 7.560 30% 7,560 30% HIHI currently is considering another sales mix option: Proposed sales mix percentage PI 25% P2 20% P3 55% Other information for the year 2022 is available as follows: Capital employed (RM) Required rate of return 50,000.000 1596 Required: (a) Calculate the breakeven point in units and value for all three products for the year 2022 if the company uses Proposed sales mix percentage PI 25% P2 20% P3 55% Other information for the year 2022 is available as follows: Capital employed (RM) Required rate of retum 50,000,000 15% I Required: (a) Calculate the breakeven point in units and value for all three products for the year 2022 if the company uses: (b) (i) Current sales mix percentage. (7 marks) (ii) Proposed sales mix percentage. (4 marks) Based on the answer in part (a)(i) and (a)(ii) above, explain whether HIHI Sdn. Bhd. should adopt the proposed sales mix plan. (2 marks) Calculate the target profit for HIHI Sdn. Bhd. to achieve the required return on capital employed of 15% for the year 2022. (1 mark) (c) (d) With the support of relevant calculations, explain whether HIHI Sdn. Bhd. can achieve the required return on capital employed of 15% using the proposed sales mix plan. (3 marks) (e) Based on the answer in part (d) above, explain TWO (2) quantitative factors and TWO (2) qualitative factors that HHI Sdn. Bhd, should consider in order to improve sales revenue. (8 marks) [Total: 25 marks

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