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The following information pertains to Beauty Berhad: Selling price per unit : RM180 Variable cost per unit : RM80 Fixed cost per year : RM400,000
The following information pertains to Beauty Berhad: Selling price per unit : RM180
Variable cost per unit : RM80
Fixed cost per year : RM400,000
Debt financing : RMB00,000 at 10% interest Number of shares : 400,000 shares
Tax rate : 24%
Required:
At a sales level of 50,000 units:
- Calculate the break-even point in Ringgit. (2 Marks)
- Calculate the degree of operating leverage (DOL), degree of financial leverage (DFL) and degree of total leverage (DTL). (3 Marks)
- Referring to your answer in (b), show the effect on the earnings per share (EPS) if:
- Sales increase by 20%
- Sales decrease by 30% (5 Marks)
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