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Sedapnya Pizza Berhad, delivers pizzas to the dormitories and apartments near a major state university. The company's annual fixed expenses are RM39,900. The selling price
Sedapnya Pizza Berhad, delivers pizzas to the dormitories and apartments near a major state university. The company's annual fixed expenses are RM39,900. The selling price of a pizza is RM10.00 and it costs the company RM5.00 for material and labour to make the pizza. The company also incurred RM1.50 delivery cost for each pizza. The current average monthly sales are 2,000 pieces of pizza. Required: a.Determine the company's break-even point in units and value for the current year.(4 marks) b.If the managers of the company decided that they want to have a margin of safety amounting to RM150,000 per year, how many pizzas that have to be sold?(4 marks) c.How many pizzas must the company sell to earn a profit of RM65,100 a year?(4 marks) d.For the coming year, the following changes are expected: A special machine would have to be bought at RM1,000. It is estimated that the machine would last 5 years with no resale value. Each pizza will be packed in a special box which costs RM0.80 each. i. What will be the new break-even point in units for coming year? (4 marks) i. If the business intends to keep its profit at the same level as the current year and anticipates maintaining its present average monthly sales, what will be the new selling price for the upcoming year? (4 marks)
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