Question
She employs 4 women to help her make the sticks. The total salaries paid to these women is RM3700 a month. She pays a logistics
She employs 4 women to help her make the sticks. The total salaries paid to these women is RM3700 a month. She pays a logistics company a fixed amount of RM670 a month to deliver the sticks to the various temples around Penang. Currently, she pays a monthly payment of RM855 to a nearby bank for a loan to purchase equipment for her business. Although she uses the utilities from her house to run her workshop, she sets aside a fixed amount of RM150 as utility expenses for her business. Since the production of joss stick generates a sizeable amounts of residual waste, she pays a rubbish disposal company RM60 a month to get rid of these waste.
Quan Yin does not have the time to do her own marketing. She has hired her cousin to help her sell her sticks. Quan Yin pays her cousin RM2.35 for every bundle sold. The cost of making one bundle of joss stick is RM5.25. The retail price for each bundle of joss stick is RM18.60. With the help of her cousin, each month Quan Yin manages to sell 950 bundles of joss stick.
a. Calculate the variable cost.
b. Calculate the fixed cost.
c. Calculate Quan Yin's monthly profit.
d. Calculate Quan Yin's monthly break-even in units.
e. Calculate the price of one bundle if Quan Yin plans to sell an average of 500 bundles per month to break-even.
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