In: Accounting
Currently, Happy Travel Sdn Bhd (HTSB) sells two (2) types of
suitcase, namely: a carryon suitcase and a deluxe suitcase. The
price and variable cost for each type of suitcase is listed
below:
Suitcase Type Price (in RM) Variable Cost (in RM) Carry-on 180 40
Deluxe 300 120
The total fixed costs for HTSB is RM60,000. For every three (3)
carry-on suitcases sells, HTSB sells one (1) deluxe suitcase.
REQUIRED:
(a) Analyze the package contribution margin for the suitcases. Show
all workings.
(b) Analyze the break-even point in units for carry-on suitcases
and deluxe suitcases. Show all workings.
(c) If HTSB has a target income for the year 2021 of
RM300,000:
i. Determine how many packages the company have to sell. Show all
workings.
ii. Determine the HTSB’s margin of safety in packages. Show all
workings.
(d) Discuss TWO (2) ways on how the above CVP analysis can be used
for HTSB’s managerial planning.