undefined

TUTORIAL CHAPTER 4: COST-VOLUME-PROFIT QUESTION 1 Happy Game Bhd manufactures and sells many types of toys. The business is considering producing a new type of toy called LPS. The manager of Happy Game Bhd estimates the monthly fixed costs to be RM1,800 which consists of RM1,200 for administrative expenses and RM600 for selling and distribution expenses. It is also estimated that the costs of material and labour to produce LPS is RM5 per unit. Additionally, the business has to incur RM1 on special packaging for each unit of LPS. As the product is relatively new to the market, the business forecasts that only 500 units of LPS will be sold during the first month at a proposed selling price of RM12 per unit. Required: a) Compute the contribution margin per unit of LPS. b) Compute the break-even-point of LPS in units and ringgit. C) How many units of LPS must be sold if the business wishes to earn a profit of RM2,400? d) If the price of the special packaging is increased to RM1.50 per unit, calculate the new break-even-point of LPS in units and ringgit