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Analyze the package contribution margin for the suitcases

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Reference no: EM132577185

Currently, Happy Travel Sdn Bhd (HTSB) sells two (2) types of suitcase, namely: a carryon suitcase and a deluxe suitcase. The price and variable cost for each type of suitcase is listed below:

Suitcase                   Type Price (in RM)               Variable Cost (in RM)

Carry-on                              180                                         40

Deluxe                                  300                                        120

The total fixed costs for HTSB is RM60,000. For every three (3) carry-on suitcases sells, HTSB sells one (1) deluxe suitcase.

REQUIRED:

Question (a) Analyze the package contribution margin for the suitcases. Show all workings. 

Question (b) Analyze the break-even point in units for carry-on suitcases and deluxe suitcases. Show all workings. 

Question (c) If HTSB has a target income for the year 2021 of RM300,000:

i. Determine how many packages the company have to sell. Show all workings. 

ii. Determine the HTSB's margin of safety in packages. Show all workings. 

Question (d) Discuss TWO (2) ways on how the above CVP analysis can be used for HTSB's managerial planning.

Reference no: EM132577185

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