b) Ceria Company plans to sell 5,000 bicycle helmets at RM75 each in the coming year. Variable cost is 60% of the sales price; contribution margin is 40% of the sales price. Total fixed cost equals RM49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: Calculate the sales income that Ceria must make to break even by using the break- even point in sales equation. Check your answer by preparing a contribution margin income statement based on the break-even point in sales value (RM).

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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b) Ceria Company plans to sell 5,000 bicycle helmets at RM75 each in the coming
year. Variable cost is 60% of the sales price; contribution margin is 40% of the
sales price. Total fixed cost equals RM49,500 (includes fixed factory overhead and
fixed selling and administrative expense).
Required:
Calculate the sales income that Ceria must make to break even by using the break-
even point in sales equation. Check your answer by preparing a contribution margin
income statement based on the break-even point in sales value (RM).
Transcribed Image Text:b) Ceria Company plans to sell 5,000 bicycle helmets at RM75 each in the coming year. Variable cost is 60% of the sales price; contribution margin is 40% of the sales price. Total fixed cost equals RM49,500 (includes fixed factory overhead and fixed selling and administrative expense). Required: Calculate the sales income that Ceria must make to break even by using the break- even point in sales equation. Check your answer by preparing a contribution margin income statement based on the break-even point in sales value (RM).
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