Am Berhad is a company producing tables. After discussing with the marketing manager, the production manager planning to focus on producing a product named AFI. The marketing manager is observing on two states, Selangor and Pahang, the sales at both states is expected to be RM500,000 an RM810,000 respectively. Information related to the cost per unit of the production for both states are as follows: SELANGOR (RM) PAHANG (RM) 135 Selling price Direct material 100 40 45 Direct labour 10 15 Overhead 20 30 50% of the overhead in SELANGOR and PAHANG are fixed. 3.Marketing manager suggested the company should sell AFl in both states as he is convinced the market would be good. However, the direct material cost will increase by 10%. Advice the management on how many additional units to be sold for both states, assuming other information remains unchanged and Am Berhad would like to maintain its annual profit. (Calculate to the nearest unit).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Am Berhad is a company producing tables. After discussing with the marketing manager, the
production manager planning to focus on producing a product named AFI. The marketing
manager is observing on two states, Selangor and Pahang, the sales at both states is
expected to be RM500,000 an RM810,000 respectively. Information related to the cost per
unit of the production for both states are as follows:
SELANGOR (RM)
PAHANG (RM)
135
Selling price
Direct material
100
40
45
Direct labour
10
15
Overhead
20
30
50% of the overhead in SELANGOR and PAHANG are fixed.
3.Marketing manager suggested the company should sell AFl in both states as he is convinced
the market would be good. However, the direct material cost will increase by 10%.
Advice the management on how many additional units to be sold for both states,
assuming other information remains unchanged and Am Berhad would like to maintain
its annual profit. (Calculate to the nearest unit).
Transcribed Image Text:Am Berhad is a company producing tables. After discussing with the marketing manager, the production manager planning to focus on producing a product named AFI. The marketing manager is observing on two states, Selangor and Pahang, the sales at both states is expected to be RM500,000 an RM810,000 respectively. Information related to the cost per unit of the production for both states are as follows: SELANGOR (RM) PAHANG (RM) 135 Selling price Direct material 100 40 45 Direct labour 10 15 Overhead 20 30 50% of the overhead in SELANGOR and PAHANG are fixed. 3.Marketing manager suggested the company should sell AFl in both states as he is convinced the market would be good. However, the direct material cost will increase by 10%. Advice the management on how many additional units to be sold for both states, assuming other information remains unchanged and Am Berhad would like to maintain its annual profit. (Calculate to the nearest unit).
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Strategic business units
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education