Two Transactions Approach

Exchange
Foreign Currency
Rate

Oct 15 Purchase ₩ 20,000,000 860

Cash ₩ 8,000,000 860
Account payable - Olaedoen Kimch ₩ 12,000,000 860

Cash ₩ 8,000,000 860

Account Receivables - Saeng Bulgogi Corp ₩ 32,000,000 860
Sales ₩ 40,000,000 860

Dec 15 Purchase
Account payable - Olaedoen Kimch

Exchange rate loss 850

Account payable - Olaedoen Kimchi Corp 850

Account Receivables - Saeng Bulgogi Corp

Sales

Account Receivables - Saeng Bulgogi Corp 850

Exchange rate gain 850

Account payable - Olaedoen Kimchi Corp ₩ 12,000,000 850

Cash ₩ 12,000,000 850

Cash ₩ 32,000,000 850

Account Receivables - Saeng Bulg ₩ 32,000,000 850

Account payable - Olaedoen Kimchi Corp ₩ 5,000,000

Purchase return ₩ 5,000,000

Account payable - Olaedoen Kimchi Corp ₩ 12,000,000

Cash ₩ 3,000,000
Purchase return ₩ 15,000,000

Interest expense ₩ 240,000

Account payable - Olaedoen Kimchi Corp ₩ 240,000
sactions Approach

SGD Equivalent Dollar

$ 23,255.81
$ 9,302.33
$ 13,953.49

$ 9,302.33
$ 37,209.30
$ 46,511.63

$ 164.16
$ 164.16

$ 437.76
$ 437.76

$ 13,953.49
$ 13,953.49

$ 37,209.30
$ 37,209.30
 Average Borrowing Total Current Value
Gearing Adjustment = x
Average Operating Assets Adjustment Made

6,000,000,000,000
= x 2,800,000,000,000
10,000,000,000,000
= 1,680,000,000,000
 Production
Unit Selling Price RM 23
Costs :
> Variable production cost (DM, DL, OH) RM 12
> Variable selling & admin RM 3
> Total fixed overhead RM 3,200,000
> Total fixed selling & admin RM 1,750,000
Additional information :
Month 1 Month 2 Month 3
> Unit produced and sold 650,000 320,000 800,000
> Normal production capacity 800,000 800,000 800,000
RM 150,000

Month 1 Month 2 Month 3

Sales RM 14,950,000 RM 7,360,000 RM 18,400,000

COGS RM 7,800,000 RM 3,840,000 RM 9,600,000
Other variabel cost - Selling & Admin RM 1,950,000 RM 960,000 RM 2,400,000
Contribution margin RM 5,200,000 RM 2,560,000 RM 6,400,000
Total fixed cost RM 4,950,000 RM 4,950,000 RM 4,950,000
Profit before interest and taxes RM 250,000 RM (2,390,000) RM 1,450,000

Target Profit + Fixed Cost

BEP in Unit =
Contribution Margin per Unit
RM 0 + RM 4,950,000 Sales
=
RM 23 - RM 12 - RM 3 COGS
RM 4,950,000 Other variabel cost
=
RM 8 Contribution margin
= 618,750 Total fixed cost
Profit before interest and taxes
Target Profit + Fixed Cost
BEP in Unit, if target profit RM 1 millions =
Contribution Margin per Unit
RM 1,000,000 + RM 4,950,000
=
RM 23 - RM 12 - RM 3
RM 5,950,000
=
RM 8
 = 743,750

Month 1 Month 2 Month 3

Minimum transfer price RM 15 RM 19.9791667 RM 15

Maximum transfer price RM 23 RM 23 RM 23
Maximum unit can be sold under special price 150,000 480,000 -

Target Profit + Fixed Cost

Unused capacity for Second Month =
Contribution Margin per Unit
RM 2,390,000 + RM 0
800,000 - 320,000 =
Price - RM 12 - RM 3 Sales
RM 2,390,000 COGS
480,000 =
Price - RM 15 Other variabel cost
RM 2,390,000 Cnontribution margin
Price - RM 15 =
480,000 Total fixed cost
Price = RM 4.9791667 + RM 15 Profit before interest and taxes
Price = RM 19.9791667
 743,750

BEP Profit RM 1 millions

RM 14,231,250 RM 17,106,250 x 23
RM 7,425,000 RM 8,925,000 x 12
RM 1,856,250 RM 2,231,250 x3
RM 4,950,000 RM 5,950,000
RM 4,950,000 RM 4,950,000 lihat soal
RM - RM 1,000,000
 RM 9,590,000

19.97916667
320,000 480,000

Month 2 Additional Sales Month 2 - New

RM 7,360,000 RM 9,590,000 RM 16,950,000

RM 3,840,000 RM 5,760,000 RM 9,600,000
RM 960,000 RM 1,440,000 RM 2,400,000
RM 2,560,000 RM 2,390,000 RM 4,950,000
RM 4,950,000 RM - RM 4,950,000
RM (2,390,000) RM 2,390,000 RM -