Reference no: EM132610078

produces a single product that sells for RM500. Cost per unit: direct material RM70, direct labour cost RM50, variable packaging cost RM30, variable marketing RM20 and variable selling costs RM30. Fixed costs are RM300,000 per annum.

Question a) Calculate contribution margin ratio.

Question b) Calculate break even in unit and in sales.

Question c) Calculate number of units to be sold to achieve a profit of RM400,000 per annum.

Question d) Calculate number of units to be sold to achieve a profit of RM500,000 per annum (after tax) with a tax rate of 20% (in units).

Question e) Suppose management believes that a RM90,000 increase in the monthly advertising expense will result in a considerable increase in sales. By how much sales needed to be increased to justify this additional expenditure?