Please solve all questions Transcribed Image Text: Excell Bhd produces and sells a single product named Champ. The company operates at

Excerpt
a special macne to engrave Alliance Sdn Bhdʻs name on the 5,000 units. Ts macne would cost RM10,000. Excell Bhd. has no assurance that Alliance Sdn. Bhd will purchase additional units in the future. Evaluate the impact on profit if ts special order is accepted.

Please solve all questions Transcribed Image Text: Excell Bhd produces and sells a single product named Champ. The company operates at its
normal capacity of 30,000 units per year. Costs associated with ts level of production and
sales are as follows:
Unit
Total
(30,000 units)
RM
RM
Direct materials
15
450,000
Direct labour
8
240,000
Variable manufacturing overhead
Fixed manufacturing overhead
Variable selling expenses
Fixed selling expenses
3
90,000
9
270,000
4
120,000
6
180,000
1,350,000
Total cost
45
The product is sold for RM50 each. Fixed manufacturing overhead is constant at RM270,000
per year witn the range of 25,000 units to 30,000 Champs per year.
Required:
Due to Covid-19 pandemic, Excell Bhd expects to sell only 25,000 units of Champ through
regular channels in year 2021. Assuming the following special orders have been received by
the company in year 2021.
a. Alliance Sdn. Bhd. has offered to purchase 5,000 units of Champ if Excell Bhd. willing to
accept a 16% discount off the regular selling price. There would be no sales commissions
on ts order; thus, variable expenses would be reduced by 75%. However, Excell Bhd.
would have to purchase a special macne to engrave Alliance Sdn Bhdʻs name on the 5,000
units. Ts macne would cost RM10,000. Excell Bhd. has no assurance that Alliance Sdn.
Bhd will purchase additional units in the future. Evaluate the impact on profit if ts special
order is accepted.

Need your ASSIGNMENT done? Use our paper writing service to score better and meet your deadline.


Click Here to Make an Order Click Here to Hire a Writer