Question
Telecomm Bhd manufactures telecommunication devices which are sold to distributors and retail outlets. The average selling price of its finished product is RM180 per unit.
Telecomm Bhd manufactures telecommunication devices which are sold to distributors and retail outlets. The average selling price of its finished product is RM180 per unit. The variable cost for these same units is RM110. Telecomm Bhd incurs fixed costs of RM630,000 per year. Calculate the followings:
(i) The break-even point in units for this company.
(ii) The Ringgit Malaysia sales volume the firm must achieve to reach the break-even point.
(iii) The firms profit or loss with the following units of production sold: 12,000 units, 15,000 units & 20,000 units.
(iv) The degree of operating leverage for the production and sales levels given in part (iii) above.
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