A company manufactures a single product for which cost and selling price data are as follows: 12 Selling price per unit (RM) Variable cost per unit(RM) Fixed costs per month(RM) Budgeted monthly sales (units) Required: a) Calculate the following: i) ii) vi) 8 96,000 30,000 The break-even point (in units) and (in sales value) The margin of safety (in units) if the sales is as budgeted. The unit of sales to produce a profit of RM25,200. The profit when 25,000 units were sold. The new break-even point (in sales value) if the variable costs per unit increases to RM9. The new break-even point (in units) if the fixed costs increases to RM110,600 per month, with no change in variable cost per unit. b) Discuss any TWO (2) limitations of break-even analysis.
A company manufactures a single product for which cost and selling price data are as follows: 12 Selling price per unit (RM) Variable cost per unit(RM) Fixed costs per month(RM) Budgeted monthly sales (units) Required: a) Calculate the following: i) ii) vi) 8 96,000 30,000 The break-even point (in units) and (in sales value) The margin of safety (in units) if the sales is as budgeted. The unit of sales to produce a profit of RM25,200. The profit when 25,000 units were sold. The new break-even point (in sales value) if the variable costs per unit increases to RM9. The new break-even point (in units) if the fixed costs increases to RM110,600 per month, with no change in variable cost per unit. b) Discuss any TWO (2) limitations of break-even analysis.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:QUESTION 4
A company manufactures a single product for which cost and selling price data are as follows:
Selling price per unit (RM)
Variable cost per unit(RM)
Fixed costs per month(RM)
Budgeted monthly sales (units)
Required:
a) Calculate the following:
i)
ii)
iii)
iv)
v)
vi)
12
8
96,000
30,000
The break-even point (in units) and (in sales value)
The margin of safety (in units) if the sales is as budgeted.
The unit of sales to produce a profit of RM25,200.
The profit when 25,000 units were sold.
The new break-even point (in sales value) if the variable costs per unit increases to
RM9.
b) Discuss any TWO (2) limitations of break-even analysis.
The new break-even point (in units) if the fixed costs increases to RM110,600 per
month, with no change in variable cost per unit.
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