Am Berhad is a company producing tables. After discussing with the marketing manager, the production manager planning to focus on producing a product named AFI. The marketing manager is observing on two states, Selangor and Pahang, the sales at both states is expected to be RM500,000 an RM810,000 respectively. Information related to the cost per unit of the production for both states are as follows: SELANGOR (RM) PAHANG (RM) Selling price Direct material 100 135 40 45 Direct labour 10 15 Overhead 20 30 50% of the overhead in SELANGOR and PAHANG are fixed. 2.Calculate the followings and show all your workings. i. The break-even point (in unit and sales value) for both states. i. The margin of safety (in unit) for both states. ii. Advice to the management in which state should the company sell AFI.

Am Berhad is a company producing tables. After discussing with the marketing manager, the production manager planning to focus on producing a product named AFI. The marketing manager is observing on two states, Selangor and Pahang, the sales at both states is expected to be RM500,000 an RM810,000 respectively. Information related to the cost per unit of the production for both states are as follows: SELANGOR (RM) PAHANG (RM) Selling price Direct material 100 135 40 45 Direct labour 10 15 Overhead 20 30 50% of the overhead in SELANGOR and PAHANG are fixed. 2.Calculate the followings and show all your workings. i. The break-even point (in unit and sales value) for both states. i. The margin of safety (in unit) for both states. ii. Advice to the management in which state should the company sell AFI.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 22E: Total cost method of product pricing Based on the data presented in Exercise 17, assume that Smart...

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