Reference no: EM132805918
Question - Jala Enterprise developed the following information for its product:
Per Unit
Sales price RM90
Variable cost 63
Contribution margin RM27
Total fixed costs RM1,080,000
Required - Answer the following independent questions and show computations using the contribution margin technique to support your answers.
1. How many units must be sold to break even?
2. What is the total sales that must be generated for the company to earn a profit of RM60,000?
3. If the company is presently selling 45,000 units, but plans to spend an additional RM108,000 on an advertising program, how many additional units must the company sell to earn the same net income it is now making?
4. Using the original data in the problem, compute a new break-even point in units if the unit sales price is increased 20%, unit variable cost is increased by 10%, and total fixed costs are increased by RM210,000.
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