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Earthy Sdn Bhd manufactures a product, X, which has the following standard costs per unit:...

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Accounting

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Earthy Sdn Bhd manufactures a product, X, which has the following standard costs per unit: RM Direct material 38 Direct wages 27 Production overhead 600,000 Selling & Distribution overhead 400,000 Additional information: i. The production overheads and selling and distribution are mixed costs where 25% and 39% of the cost vary with the number of units produced. ii. The administration and storage costs incurred are RM 260,000 and RM 185,000 which are fixed in nature. iii. The annual sales revenue is RM 3,000,000. The company managed to sell out all of product X produced for that year iv. The selling price is RM 250 per unit. Based on the information given, a) CALCULATE the break-even point in units and value for the company. (10 marks) b) EXPLAIN what would happen to the break-even point in units and value if the company increase their selling price by 30%. (please provide working solutions)

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