SCAN Sdn Bhd manufactures a single product.

The following information is available for the second half year of 2021:

RM per unit Selling price 80 Direct material 35 Direct labour 10 Variable overheads 15 Fixed costs: RM - Factory 80,000 - Administration 40,000 - Distribution 20,000 The company plans to produce and sell 11,000 units of the product.

Required:

(a) Calculate the contribution / sales ratio. (2 marks)

(b) Calculate the break-even point in units and in the value. (2 marks)

(c) Calculate the margin of safety in percentage of sales. (2 marks)

(d) Calculate the sales value required to achieve a targeted profit of RM86,000. (3 marks)

(e) Calculate the profit or loss that would be made if the sales volume is 13,500 units. (3 marks)

(f) The company is also considering another proposal. Under this proposal, the selling price is increased by 5% and the variable costs are decreased by 20%. Calculate the revised break-even point in units and in value. (Answer should be rounded to the nearest unit and RM.) (4 marks)

(g) Advise the company whether to accept the new proposal in part (f) above. (3 marks)

(h) Explain THREE (3) factors which the company should consider before accepting a proposal. (6 marks)