Melon Company, a manufacturer of desks which has been established for more than 5 years. As at December, 2018 the company has sold 2,400 units of desks. The sales price of each desk is RM40 per unit. The variable cost to produce one desk is RM15 per unit. Fixed costs for the desk production is RM20,000. Required: a) Compute the variable cost ratio and contribution margin ratio. b) Compute the breakeven unit and sales. c) Calculate the number of desk Melon Company needs to sell in order to achieve a profit of RMI00,000 per annum.

Melon Company, a manufacturer of desks which has been established for more than 5 years. As at December, 2018 the company has sold 2,400 units of desks. The sales price of each desk is RM40 per unit. The variable cost to produce one desk is RM15 per unit. Fixed costs for the desk production is RM20,000. Required: a) Compute the variable cost ratio and contribution margin ratio. b) Compute the breakeven unit and sales. c) Calculate the number of desk Melon Company needs to sell in order to achieve a profit of RMI00,000 per annum.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 58P: Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and...

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