STATEMENTS OF COMPREHENSIVE INCOME

2016

2017

2018

2019

2020

Revenue

1,377,931,000

1,529,077,000

2,079,432,000

2,053,916,000

2,314,454,000

Cost of sales

-1,150,360,000

-1,155,975,000

-1,640,550,000

-1,818,767,000

-1,851,563,200

Gross profit

227,571,000

373,102,000

438,882,000

235,149,000

462,890,800

Other Income

8,973,000

6,979,000

10,372,000

26,689,000

15,634,000

Selling and distribution expenses

-46,520,000

-95,484,000

-66,008,000

-67,121,000

-71,401,000

Administration expenses

-46,155,000

-53,091,000

-80,987,000

60,495,000

-178,910,800

Operating Profit

143,869,000

231,506,000

302,259,000

134,222,000

228,213,000

Interest income

0

0

4,288,000

10,573,000

12,340,000

Finance cost

-10,151,000

-8,530,000

-639,000

-242,000

-113,000

Share of loss/profit

909,000

-984,000

-947,000

917,000

262,000

Profit before tax

134,627,000

221,992,000

304,961,000

145,470,000

240,702,000

Taxation

-26,524,000

-53,922,000

-54,550,000

-30,338,000

-33,417,000

Profit / (Loss) after tax

108,103,000

168,070,000

250,411,000

115,132,000

207,285,000

You are required :

1.Separate the fixed and variable costs of the company

Changes in total costs

Variable costs = ------------------------------- =

Changes in Volume

= = - 0.8659

Fixed costs =Total costs - Variable costs =Total costs - Volume ( variables costs)

= 1,243,035,000 - 2,314,454,000 (- 0.8659)

= 1,243,035,000 - 2,004,085,718.60

= -761,050,718.60

2.Determine the projected Fixed overheads / Operating expenses of the company for 2023

3.Determine the projected Profit margin of the company's manufacturing operation

Profit margin = Selling price - Variable costs

=RM 1.00 - 0.8659 = RM 0.1341

= 0.1341

3.Determine the Breakeven point of the company's manufacturing now ?

What is the current level of Safety margin of the company ?

Break even point(BEP) formula :

Breakeven is the point where Total revenue = Total expenses ---- No profit and no loss

Giving the minimum volume of business required to continue surviving

Operating expenses2,837,494,000

BEP = --------------------------- = -------------------------- =RM 4,858,722,600

Profit margin0.0584

5.Determine the Degree of Operating Leverage(DOL) of the company ?

6.Determine the degree of Financial Leverage (DOL) of the company ?

7.If the company have been selling its rubber glove at an average price of RM 0.40 per pair, what could be the lowest price that company could accept for a special order of say 500,000,000 gloves if the company could create the capacity conveniently without increasing its operating costs ?

8.Based on the average variable costs of manufacturing per pair, could the company consider taking over a manufacturing space / capacity that could produce at RM 0.15 per pair. ?