Reference no: EM132542048

Silikon cards makes a high-capacity memory card, SC- 100, for use in electronic equipment. Silikon's owner, Monique Meijia, started the company because she believed the memory cards would gain widespread acceptance. Monique believed the demand for portable electronics would increase and, in turn, stimulate the demand for memory cards.

• During the upcoming year, Silikon expects to sell 450000 SC-100 cards at an average selling price of RM 30 per card. Silikon's unjt variable cost is RM 18 per card, and its annual fixed costs equal RM 4800000.

Question a) Compute break-even point in units and in Ringgit Malaysia

Question b) Compute silikon's expected margin of safety for the coming year. Also, what would sales volume need to be if Monique desires a 20% margin of safety?

Question c) Compute how many cards silikon need to sell to earn an annual pre-tax profit of RM 1800000? Assume Silikon pays income taxes equal to 40 % of profit before taxes

Question d) Silikon's marketing manager is requesting an additional RM 750000 for advertising and promotion. How would Silikon's volume change if Monique agrees to this expenditue?Assume that the Marketing Manager believes that sales will increase by 100,000 cards if Silicon spends an additional $750,000 on advertising and promotion. By how much, will Silikon's profit after taxes increase or decrease due to the advertising, assuming the 'tax rate is the same as in (c) above.