Separate the fixed and variable costs of the company
|The following is the extract of the Income statement of a Rubber Glove company in Malaysia :|
|STATEMENTS OF COMPREHENSIVE INCOME2016||2017||2018||2019||2020|
|Cost of sales||-1,150,360,000||-1,155,975,000||-1,640,550,000||-1,818,767,000||-1,851,563,200|
|Selling and distribution expenses||-46,520,000||-95,484,000||-66,008,000||-67,121,000||-71,401,000|
|Share of loss/profit||909,000||-984,000||-947,000||917,000||262,000|
|Profit before tax||134,627,000||221,992,000||304,961,000||145,470,000||240,702,000|
|Profit / (Loss) after tax||108,103,000||168,070,000||250,411,000||115,132,000||207,285,000|
You are required :
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. ?