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The following information relates to a clock manufacturer: - RM Fixed production costs per annum 40,000 Fixed non-production costs per annum 20,000 Selling price per

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The following information relates to a clock manufacturer: - RM Fixed production costs per annum 40,000 Fixed non-production costs per annum 20,000 Selling price per unit 20 Direct material cost per unit Direct labour cost per unit Variable overhead cost per unit The clock manufacturer currently expects to sell 8,500 units of its product. You are an intern to the management accountant at this company. The management accountant has requested the following details from you (Note: questions in parts (a)-(e) below must be answered independently): (a) Find the breakeven point and breakeven sales revenue. (3 marks) (b) Calculate the number of units that must be sold to obtain RM30,000 profits. (3 marks) (c) Calculate the contribution to sales ratio and explain your answer. (4 marks) (d) Calculate the margin of safety and explain your answer. (4 marks) (e) How many additional units must be sold to meet an increase in fixed production costs of RM8.500 per fu the mirrent profit? (b) Calculate the number of units that must be sold to obtain RM30,000 profits. (3 marks) (c) Calculate the contribution to sales ratio and explain your answer. (4 marks (d) Calculate the margin of safety and explain your answer. (4 marks) (e) How many additional units must be sold to meet an increase in fixed production costs of RM8,500 per annum without any change in the current profit? (3 marks) (f) Explain THREE (3) ways in which a company may increase its product's contribution to sales ratio. (6 marks) (g) Highlight TWO (2) assumptions of the cost-volume- profit model. (2 marks) [Total: 25 Marks]

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