Reference no: EM132583075

In 2019 the Dharma Homeless (DH) had sold 950 lunch coupons at RM65 each to raise fund for its association. The following report was prepared for the lunch event in 2019:

Dharma Homeless

Fund Raising Income Statement for 2019

RM

Lunch coupons sales                                            61,750

Less: cost of foods and drinks for the lunch              37,100

Gross margin                                                       24,650

Less: other cost related to lunch coupons                 28,550

Loss                                                                  (3,900)

The cost of the foods and drinks can be broken down into RM12,400 fixed costs and the remaining were variable costs. Other cost related to lunch coupons amounted to RM28,550 of which RM14,300 were fixed and RM14,250 were variable.

REQUIRED:

Question (a) Prepare income statement for the year 2019 using the contribution margin format.

Question (b) Determine the number of lunch coupons should have been sold in order to breakeven in 2019.

Question (c) Calculate the profit for 2020 if DH is to double the sales of lunch coupons assuming fixed costs will be the same as last year.

Question (d) Suggest any TWO (2) alternatives that can reduce the cost of organizing lunch fund raising program.