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The production manager is proposing the use of new machinery that will reduce the material cost by 8% and the labour cost by 10%. The
The production manager is proposing the use of new machinery that will reduce the material cost by 8% and the labour cost by 10%. The new machinery will have an additional fixed cost of RM 60,000. The production manager is asking for your advice whether the new machine benefit Coffeeworks. b) Determine the following i. Marginal cost per coffee machine ii. Break-even point in term of Unit Margin of Safety iv. A statement of profit or loss (Using Marginal Costing Approach) to show the profit or loss if 15,000 coffee machines are sold Advise the Production Manager on the proposal of new machine (4 Marks) V. Total: 25 MARKS] The production manager is proposing the use of new machinery that will reduce the material cost by 8% and the labour cost by 10%. The new machinery will have an additional fixed cost of RM 60,000. The production manager is asking for your advice whether the new machine benefit Coffeeworks. b) Determine the following i. Marginal cost per coffee machine ii. Break-even point in term of Unit Margin of Safety iv. A statement of profit or loss (Using Marginal Costing Approach) to show the profit or loss if 15,000 coffee machines are sold Advise the Production Manager on the proposal of new machine (4 Marks) V. Total: 25 MARKS]
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