The following is Saga Berhad contribution format statement of profit or loss for December 2020:

	RM000	RM000
		(Per Unit)
Sales	110	275
Variable costs	44	110
Contribution margin	66	165
Fixed costs	52.8
Net operating income	13.2

Required:

1. Determine the total contribution margin at the break-even point. Calculation is not required.

2. Management is considering the use of plastic-based material to replace metal-based material in its product. This change would reduce variable costs by RM15. The company's marketing manager predicts that this would reduce the overall quality of the product and thus would result in a decline in sales to a level of 350 units per month. Should this change be made?

3. Assume that the company is currently selling 400 units per month. Management wants to increase sales and feels this can be done by cutting the selling price by RM25 per unit and increasing the advertising budget by RM20,000 per month. Management believes that these actions will increase unit sales by 50%. Should these changes be made?

4. Assume that the company is currently selling 400 units. Management wants to automate a portion of the production process. The new robotic equipment would reduce direct labor costs by RM20 per unit but would result in a monthly rental cost for the new robotic equipment of RM10,000. Management believes that the new equipment will increase the reliability of its products thus resulting in an increase in monthly sales of 12%. Should these changes be made?