Sempoerna Enterprise sells a special Sabah souvenir product which is a bestseller among tourists to...
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Accounting
Sempoerna Enterprise sells a special Sabah souvenir product which is a bestseller among tourists to the state of Sabah. Sales and net operating income for the most recent year is given below: Required: a) Calculate the contribution margin ratio. b) Calculate the variable expense ratio. (1 mark) c) Calculate the company's break-even point in both unit and Ringgit sales. (1 mark) d) Calculate the margin of safety in both Ringgit and percentage. (2 marks) (2 marks) e) Briefly discuss the importance of calculating the margin of safety. (2 marks) f) Calculate the number of units that would have to be sold to earn a target profit of RM45,000. (2 marks) g) Refer to the original information. Sempoerna Enterprise's marketing manager proposed that the advertising expense be increased by RM25,000 in order to get additional sales of 1,250 units from overseas. i) Based on operating income/loss calculation, should the company's management accept the marketing manager's proposal? (3 marks) ii) Briefly discuss one (1) other factor besides i) above that the company's management should consider when deciding the marketing manager's proposal. (2 marks) TOTAL 15 MARKS
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