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URGENT!!! QUESTION 3 Pinky Bakeries Sdn. Bhd. runs two concurrent product lines at its bakery-caf in Petaling Jaya: (1) (2) the over-the-counter Sourdough and Burebrot
URGENT!!!
QUESTION 3 Pinky Bakeries Sdn. Bhd. runs two concurrent product lines at its bakery-caf in Petaling Jaya: (1) (2) the over-the-counter Sourdough and Burebrot breads, and, the dine-in California sandwiches and Schweizer sandwiches. In-house customers have the option of coffee or tea for their sandwich orders. Eliza, the cost accountant, has the following sales and costs information for March 2022: Product Line Products Sales Unit Breads Sourdough Burebrot California Schweizer Coffee Tea Unit Selling Price RM20.00 RM15.00 RM10.00 RM8.00 RM9.00 RM8.00 650 520 390 390 520 130 Sandwiches Unit Variable Costs RM10.00 RM9.00 RM5.00 RM4.00 RM4.50 RM2.00 Drinks The bakery-caf is currently operating on limited machine hours (MH) resource at a monthly fixed cost of RM20,000. Relevant production data concerning each unit of product sold are as given: Product Line Products Breads Required Direct Labour Hours 6.00 4.00 0.25 0.25 0.15 0.10 Sourdough Burebrot California Schweizer Coffee Tea Required Machine Hours 1.00 0.75 0.25 0.25 0.10 0.05 Sandwiches Drinks The owner is considering to increase the bakery-caf's sales figure to achieve a desired net income of RM10,000 per month in the coming months. In order to meet its sales target, the owner is proposing to allocate extra machine hour (MH) resource from its current budget structure for the production of Burebrot breads to increase its production. Required: a) Compute the following: (i) (ii) sales mix as a function of units sold weighted-average unit contribution margin (7 marks) b) How many units in total and of each product will the bakery-caf need to sell each month to break-even? (3.5 marks) c) Using the weighted-average unit contribution margin method, calculate the total required sales (in Ringgit Malaysia) for the business to achieve the target net income of RM10,000. (6.5 marks) d) Eliza believes the owner's proposal to allocate additional machine hour (MH) resource to the Burebrot breads is not operationally efficient. She believes that the extra resource would be better allocated to Sourdough breads instead. Is Eliza's opinion reasonable? Why? Show workings on the contribution margins for each of the BREADS product line where necessaryStep by Step Solution
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