SECTION B-STRUCTURED QUESTIONS Answer ALL questions. QUESTION 1 (20 MARKS) [TOTAL:40 MARKS] Apple Food Sdn Bhd...

Transcribed Image Text:

SECTION B-STRUCTURED QUESTIONS Answer ALL questions. QUESTION 1 (20 MARKS) [TOTAL:40 MARKS] Apple Food Sdn Bhd is a company producing and selling pies called "Apple-Paie". Market research shows that the company could sell at least 60,000 packets per month at a selling price of RM4.00 per packet. For each packet sold, the manager is confident of getting 10% contribution margin. The following fixed costs are expected to be incurred during September 2021: Rent Wages and salaries Miscellaneous expenses RM 5,000 8,000 1,500 For production purposes, the company needs to use the following assets. The depreciation rates for the assets are as follows: Noted: Motor vehicle Machinery Cost RM20,000 Depreciation rate 15% per annum RM30,000 20% per annum i. All calculations are to be made to two decimal places ii. Each question is to be treated independently Required: a) Identify in detail the total fixed costs for product "Apple-Paie". (4 marks) b) Determine: i. BEP (units and RM). Whether the company can achieve the breakeven point at the current sales level? Explain. (6 marks) ii. The new selling price if the company plans to breakeven at the sales level of 40,000 packets per month. (4 marks) c) The company believes that by spending an extra of RM5,000 per month on marketing and promotion, it will increase the sales to 80,000 packets per month. Advice whether the company should implement the plan based on profitability. (6 marks) (20 marks) SECTION B-STRUCTURED QUESTIONS Answer ALL questions. QUESTION 1 (20 MARKS) [TOTAL:40 MARKS] Apple Food Sdn Bhd is a company producing and selling pies called "Apple-Paie". Market research shows that the company could sell at least 60,000 packets per month at a selling price of RM4.00 per packet. For each packet sold, the manager is confident of getting 10% contribution margin. The following fixed costs are expected to be incurred during September 2021: Rent Wages and salaries Miscellaneous expenses RM 5,000 8,000 1,500 For production purposes, the company needs to use the following assets. The depreciation rates for the assets are as follows: Noted: Motor vehicle Machinery Cost RM20,000 Depreciation rate 15% per annum RM30,000 20% per annum i. All calculations are to be made to two decimal places ii. Each question is to be treated independently Required: a) Identify in detail the total fixed costs for product "Apple-Paie". (4 marks) b) Determine: i. BEP (units and RM). Whether the company can achieve the breakeven point at the current sales level? Explain. (6 marks) ii. The new selling price if the company plans to breakeven at the sales level of 40,000 packets per month. (4 marks) c) The company believes that by spending an extra of RM5,000 per month on marketing and promotion, it will increase the sales to 80,000 packets per month. Advice whether the company should implement the plan based on profitability. (6 marks) (20 marks)