QUESTION 1 The Asian Division of Worldwide Reference Corporation produces a pocket dictionary containing popular phases in six Asian languages. Last year, the company sold 100,000 units of dictionary at RM20 per unit. Given below the cost incurred with regard to the dictionary in last year. Costs: Variable (RM) Fixed (RM) Direct material 600,000 400,000 300,000 100,000 Direct labour Production overhead 200,000 220,000 Selling and administrative The company expects the same costs as last year will incur for the current year. Required: a. Compute the company's break-even point in units and sales value. b. Compute the company's margin of safety in units and sales value. c. Compute the operating income for last year of Asian Division.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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QUESTION 1
The Asian Division of Worldwide Reference Corporation produces a pocket dictionary
containing popular phases in six Asian languages. Last year, the company sold 100,000 units
of dictionary at RM20 per unit. Given below the cost incurred with regard to the dictionary in
last year.
Costs:
Variable (RM)
Fixed (RM)
Direct material
600,000
400,000
300,000
Direct labour
Production overhead
200,000
220,000
Selling and administrative
100,000
The company expects the same costs as last year will incur for the current year.
Required:
a. Compute the company's break-even point in units and sales value.
b. Compute the company's margin of safety in units and sales value.
c. Compute the operating income for last year of Asian Division.
d. If the company's targeted operating income is RM360,000 for this year, how many units
must be sold to reach the targeted operating income?
Transcribed Image Text:QUESTION 1 The Asian Division of Worldwide Reference Corporation produces a pocket dictionary containing popular phases in six Asian languages. Last year, the company sold 100,000 units of dictionary at RM20 per unit. Given below the cost incurred with regard to the dictionary in last year. Costs: Variable (RM) Fixed (RM) Direct material 600,000 400,000 300,000 Direct labour Production overhead 200,000 220,000 Selling and administrative 100,000 The company expects the same costs as last year will incur for the current year. Required: a. Compute the company's break-even point in units and sales value. b. Compute the company's margin of safety in units and sales value. c. Compute the operating income for last year of Asian Division. d. If the company's targeted operating income is RM360,000 for this year, how many units must be sold to reach the targeted operating income?
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