Reference no: EM132600352

Question - Malaysia Magazine Bhd produces a sports magazine which is sold for RM 9.00 per copy. During the month of July 2018, a total of 25,000 magazines were produced and sold. The following costs for the month were available:

RM

Direct labor 1.50

Direct material 2.50

Direct expenses 0.50

Variable costs per copy 4.50

Fixed monthly expenses RM

Electricity 6,500

Rental of building 12,000

Depreciation of printing machine 7,500

Salaries and wages 19,000

REQUIRED -

Calculate the break-even point for the magazine in number of copies and in ringgit.

Calculate the margin of safety for the magazine in number of copies and in ringgit.

Calculate how many copies should be sold to achieve a target profit of RM 75,000, if selling commission of RM 0.50 is given per copy of magazine sold.

Referring to the original data, the marketing manager proposed to make an advertising campaign which would cost RM 9,000. The unit sales are expected to increase by 20%. Calculate:

1. The net profit if the proposal is accepted.

2. The new break-even point in number of copies if the proposal is accepted.