QUESTION 4 Millenium Bhd is a manufacturing company which produces one type of product, Z3. The current year's budget based on the production and sales of 40,000 units of Z3 shows the following data: RM Total variable costs 2,520,000 Fixed overhead costs: Production 2,900,000 Administrative 500,000 Selling and distribution 578,000 Total contribution 4,680,000 The manager is not satisfied with the current sales and budgeted annual profit. He wishes to have a minimum annual profit of RM1,000,000. He suggests that the product should be advertised on television which will incur additional cost of RM50,000. He also proposes to hire a consultant and the annual fee is RM252,000. As a result of these sales volume will increase by 32%. The variable cost per unit will remain unchanged. Required: a. Using the current budgeted data only, calculate: i) the annual profit ii) the selling price per unit iii) the break-even point in units b. Based on the manager's suggestions, calculate: i) the new selling price to obtain the minimum annual profits of RM1,000,000. ii) the revised break-even point in units using the price calculated in (i) above.

QUESTION 4 Millenium Bhd is a manufacturing company which produces one type of product, Z3. The current year's budget based on the production and sales of 40,000 units of Z3 shows the following data: RM Total variable costs 2,520,000 Fixed overhead costs: Production 2,900,000 Administrative 500,000 Selling and distribution 578,000 Total contribution 4,680,000 The manager is not satisfied with the current sales and budgeted annual profit. He wishes to have a minimum annual profit of RM1,000,000. He suggests that the product should be advertised on television which will incur additional cost of RM50,000. He also proposes to hire a consultant and the annual fee is RM252,000. As a result of these sales volume will increase by 32%. The variable cost per unit will remain unchanged. Required: a. Using the current budgeted data only, calculate: i) the annual profit ii) the selling price per unit iii) the break-even point in units b. Based on the manager's suggestions, calculate: i) the new selling price to obtain the minimum annual profits of RM1,000,000. ii) the revised break-even point in units using the price calculated in (i) above.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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