Question

SeeThru Company produces decorative 200ml glass containers. SeeThru sells the glass for RM40 per box of 50 containers. Variable and fixed costs are as follows:

Variable Costs per Box			Fixed Costs per Month
	(RM)	(RM)		(RM)
Manufacturing:			Manufacturing overhead	15,000
Direct materials	15		Selling and Administrative	10,000
Direct labour	3		Total	25,000
Manufacturing overhead	10	28
Selling and Administrative		2
Total		30

In September 2020, SeeThru produced and sold 3,000 boxes of the glass containers.

Required:

1. Prepare a contribution margin income statement for September 2020.

(4 marks)

2. Prepare a cost-volume-profit graph with sales unit on the horizontal axis. Label the revenue line, total costs line, fixed costs line, loss area, profit area, and break-even point. The recommended scale for the vertical axis is 0 to 5,000 and the recommended scale for the vertical axis is RM0 to RM200,000.

(3 marks)

3. Determine SeeThrus monthly break-even point in units and in RM.

(3 marks)

4. Determine the monthly RM sales required for a monthly profit of RM5,000 (ignore taxes)

(2 marks)

5. Assuming SeeThru is subject to 30 percent income tax, determine the monthly sales unit required to earn a monthly after-tax profit of RM5,250.

(3 marks)

6. Determine the margin-of-safety for September 2020 in units and in RM.

(2 marks)