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2. Fatima owns a manufacturing company that produces wooden chairs. She determines that the cost of producing a new type of chair is as follows:
2. Fatima owns a manufacturing company that produces wooden chairs. She determines that the cost of producing a new type of chair is as follows: Interest rate (i) = 10% Equipment cost: $288,000/year Equipment salvage value at EOY 5: $41,000 Variable cost per chair: $14.55 Overhead cost per year: $48,300 If Fatima's company uses a 5-year planning horizon and the chair can be sold for a price of $39.75, use a current cost approach to determine how many units must be produced and sold each year to break even? (10 points) a. 65,099 chairs b. 13,020 chairs C. 69,047 chairs d. 64,300 chairs
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