Consider the following projects


2016
2017201820192020
Revenue1,377,931,0001,529,077,0002,079,432,0002,053,916,0002,314,454,000
Cost of sales-1,150,360,000-1,155,975,000-1,640,550,000-1,818,767,000-1,851,563,200
 Gross profit227,571,000373,102,000438,882,000235,149,000462,890,800
      
 Other Income8,973,0006,979,00010,372,00026,689,00015,634,000
 Selling and distribution expenses-46,520,000-95,484,000-66,008,000-67,121,000-71,401,000
 Administration expenses-46,155,000-53,091,000-80,987,00060,495,000-178,910,800
       
       
 Operating Profit143,869,000231,506,000302,259,000134,222,000228,213,000
       
 Interest income004,288,00010,573,00012,340,000
 Finance cost-10,151,000-8,530,000-639,000-242,000-113,000
 Share of loss/profit909,000-984,000-947,000917,000262,000
 Profit before tax134,627,000221,992,000304,961,000145,470,000240,702,000
 Taxation-26,524,000-53,922,000-54,550,000-30,338,000-33,417,000
 Profit / (Loss) after tax108,103,000168,070,000250,411,000115,132,000207,285,000
       
The following is the extract of the Income statement of a Rubber Glove company in Malaysia :

 STATEMENTS OF COMPREHENSIVE INCOME

You are required :

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1.     Separate the fixed and variable costs of the company

2.     Determine the projected Fixed overheads / Operating expenses of the company for 2023

3.     Determine the projected Profit margin of the company’s manufacturing operation

4.     Determine the Breakeven point of the company’s manufacturing now ? What is the current level of Safety margin of the company ?

5.     Determine the Degree of Operating Leverage  (DOL) of the company ?

6.     Determine the degree of Financial Leverage (DOL) of the company ?

7.     If the company have been selling its rubber glove at an avverage price of RM 0.40 per pair, what could be the lowest price that company could accept for a special order of say 500,000,000 gloves if the company could create the cpacity conveniently without increasing its operating costs ?

 8.     Based on the average variable costs of manufacturing per pair, could the company consider taking over a manufacturing space / capacity that could produce at RM 0.15 per pair. ?

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