Reference no: EM132468595
Questiona HD Vision Bhd manufactures and sells televisions. Information on prices and other related costs are as follows:
Selling price per television RM6,250
Variable cost per unit RM
Direct material 2.825
Direct labour 1,250
Manufacturing overhead 750
Selling expenses 325
Total variable cost per unit 4,050
Annual ?xed cost RM
Manufacturing overhead 48,000,000
Selling and administrative 69.000.000
Total ?xed costs 117,000,000
Forecasted annual sales volume (120.000 units) RM750.000,000
Required:
Question a) Calculate the break-even point (in RM and units) and the margin of safety (in percentage) for HD Vision Bhd.
Question b) Compute the HD Vision Bhd required sales (in RM and Units) in order to earn an income of RM05.000.000.
Question c) If the management of HD Vision Bhd estimates that direct labour costs will increase by eight percent next year.
i. How many units that the company needs to sell for the next year in order to reach its break-even point?
ii. What is the product's new selling price per unit that should be charged to maintain the contribution margin ratio? (round up to two decimal points).
Question d) Explain what will happen to the company's break-even point if the sales price and unit variable cost of the product increase by the same amount.