Question
The following information relates to Sally who has been running a boutique in a busy shopping mall in Klang since 2005. She has 3 sections
The following information relates to Sally who has been running a boutique in a busy shopping mall in Klang since 2005. She has 3 sections of clothing, namely baju kurung, baju moden and 4-metre batik pieces. Her son, Arman, who recently graduated with an accounting degree, prepared the statement of profit and loss that shows that the batik piece section is running at loss of RM14,000. Sally is now considering dropping the batik piece section. The following information relates to the last 12 months of oparations. Sales Total costs Net profit loss Baju kurung RM 120,000 86,000 34,000 Baju moden RM 75,000 47,000 28,000 Batik pieces RM 97,000 111,000 (14,000) Total fixed costs amount to RM30,000 which s apportioned equally to the sections. Required: Advice Sally on whether the Batik Pieces section should be dropped or not. (9 marks)
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