Selasih Company manufactures aluminium containers for restaurants. The owner of Selasih, Puan Atiqah,believes that an aggressive campaign is needed next year due to the Malaysian local market's uncertainconditions. Presented below is the data for the current year 2021, for use in next year's campaign.COST SCHEDULEVariable Costs per BoxFixed Costs per Month(RM)(RM)Manufacturing:Manufacturing overheadSelling and AdministrativeTotal25,000Direct materials4110,000Direct labour per unit8.135,000Manufacturing overheadTotal315Puan Atiqah has set the sales target for the year 2022 at a level of RM550,000 (22,000 units of containers),or ten percent more than the sales in the year 2021. The selling price of the container is RM25 each, for bothyears.Required:"Break-even analysis is of limited use to management because a company cannot survive by just breakingeven." Do you agree with the statement? Explain.

We would first need to know what is a break even point. Break even point is a point where there is…

Selasih Company manufactures aluminium containers for restaurants. The owner of Selasih, Puan Atiqah, believes that an aggressive campaign is needed next year due to the Malaysian local market's uncertain conditions. Presented below is the data for the current year 2021, for use in next year's campaign. COST SCHEDULE Variable Costs per Box Fixed Costs per Month (RM) Manufacturing overhead Selling and Administrative Total (RM) 25,000 110,000 135,000 Manufacturing: Direct materials 4 Direct labour per unit Manufacturing overhead Total 8 3 Puan Atiqah has set the sales target for the year 2022 at a level of RM550,000 (22,000 units of containers), or ten percent more than the sales in the year 2021. The selling price of the container is RM25 each, for both years. Required: "Break-even analysis is of limited use to management because a company cannot survive by just breaking even." Do you agree with the statement? Explain.

Selasih Company manufactures aluminium containers for restaurants. The owner of Selasih, Puan Atiqah, believes that an aggressive campaign is needed next year due to the Malaysian local market's uncertain conditions. Presented below is the data for the current year 2021, for use in next year's campaign. COST SCHEDULE Variable Costs per Box Fixed Costs per Month (RM) Manufacturing overhead Selling and Administrative Total (RM) 25,000 110,000 135,000 Manufacturing: Direct materials 4 Direct labour per unit Manufacturing overhead Total 8 3 Puan Atiqah has set the sales target for the year 2022 at a level of RM550,000 (22,000 units of containers), or ten percent more than the sales in the year 2021. The selling price of the container is RM25 each, for both years. Required: "Break-even analysis is of limited use to management because a company cannot survive by just breaking even." Do you agree with the statement? Explain.

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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