Reference no: EM132566784

Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for RM20 per unit. Variable expenses are RM8 per unit, and fixed expenses total RM180,000 per year. Its operating results for last year were as follows:

Sales                                         400.000

Variable Expenses                            160.000

Contribution Margin                             240.000  

Fixed Expenses                                     180.000

Net Profit                                              60.000

Required:

Answer each question independently based on the original data:

Question 1. What is the product's CM ratio?

Question 2. Determine the break-even point in dollar sales.

Question 3. If this year's sales increase by RM75,000 and fixed expenses do not change, how much will net operating income increase?

Question 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms.

Question 5. How many units must be sold each to attain a target profit of RM80,OOO.