[ANSWER FOR MANAGERIAL COST ACCOUNTING HOMEWORK]

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QUESTION 1

Beauty Sdn. Bhd. is a Cosmetic company which produces and sells cream lipstick. On average, they are able to sell 950 units of lipstick per annum at a selling price of RM200 per unit. The following data is related to this product.           

Required:                               

(a)      Calculate the following:                                                                                                          

i.        Break- even point in unit and value.                                                                                                  

ii.          Margin of safety in unit and value.                                                                                                    

iii.         Net profit earned by the company.                                                                      

(b)     Calculate the number of lipsticks that is needed to be produced and sold by the company if its desired profit is set to be RM135,000 for the year.                                                                                                     

               (c)     Assume that if the company increase their annual fixed cost and total variable cost by 10% and 15%, respectively, an increase in sales level is expected to be 1,100 units. Calculate the new net profit that the company will earn if these changes are made.                                 

            (d)        The management of Beauty Sdn. Bhd. decides to use quality material in the manufacturing of their product, which will increase the material cost by RM 15 per unit and transportation cost of RM4,000. The manager predicts that an increase in these costs will lead to better product quality for which it helps to increase sales to 1,600 units. Should the change be made by the company?