1. **Problem Statement:** Calculate the break-even point in units and value, total variable expenses at break-even, units needed for target profit, and evaluate a sales proposal for Evangers Sdn. Bhd. based on the given income statement. 2. **Given Data:** - Sales = 250,000 - Variable Cost = 130,000 - Contribution Margin = 120,000 - Fixed Cost = 76,000 - Net Income = 44,000 - Selling price per unit = 25 - No inventories 3. **Formulas and Rules:** - Contribution Margin per unit = Selling price per unit - Variable cost per unit - Break-even point in units = Fixed Costs / Contribution Margin per unit - Break-even point in value = Break-even units × Selling price per unit - Total variable expenses at break-even = Variable cost per unit × Break-even units - Units for target profit = (Fixed Costs + Target Profit) / Contribution Margin per unit 4. **Calculations:** - Variable cost per unit = $\frac{130000}{\frac{250000}{25}} = \frac{130000}{10000} = 13$ - Contribution margin per unit = $25 - 13 = 12$ (a) Break-even point in units: $$\text{Break-even units} = \frac{76000}{12} = 6333.33 \approx 6334 \text{ units}$$ Break-even point in value: $$6334 \times 25 = 158350$$ (b) Total variable expenses at break-even: $$13 \times 6334 = 82342$$ (c) Units to earn target profit of 55000: $$\text{Units} = \frac{76000 + 55000}{12} = \frac{131000}{12} = 10916.67 \approx 10917 \text{ units}$$ (d) Proposal evaluation: - New fixed cost = $76000 + 6000 = 82000$ - New variable cost per unit = $13 + 1 = 14$ - New contribution margin per unit = $25 - 14 = 11$ - New sales units = $10000 + 3000 = 13000$ - New net income: $$\text{Contribution} = 13000 \times 11 = 143000$$ $$\text{Net Income} = 143000 - 82000 = 61000$$ - Compare with old net income 44000, new net income is higher by 17000. **Conclusion:** The company should accept the proposal as net income increases. Final answers: - Break-even units = 6334 units - Break-even value = 158350 - Variable expenses at break-even = 82342 - Units for target profit = 10917 units - Proposal increases net income to 61000, accept proposal.