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8. Bush Co. makes bookcases. Each bookcase requires 20 board feet of oak lumber plus fittings, which cost $50. Oak lumber costs S15 per board

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8. Bush Co. makes bookcases. Each bookcase requires 20 board feet of oak lumber plus fittings, which cost $50. Oak lumber costs S15 per board foot. Direct labour is paid $25 per hour, and it takes four hours to make each bookcase. The workshop in which the bookcases are made is rented at $2,000 per month. Depreciation of plant an equipment costs $100 per month. Other production and administra- per month. Each tive overhead (all of which is fixed cost) is $5,400 bookcase is sold for $950. Average monthly sales are 20 bookcases Required (a) Calculate the following: (i) Variable cost per bookcase (ii) Contribution margin per bookcase (ii) Total fixed cost per month (iv) Monthly break-even point in units (v) Monthly break-even point in sales dollars (vi) Monthly operating profit of $5,000? many additional bookcases would the company need to sell to (b) How many bookcases must be sold to make an operating profit (c) If the company spent an additional $1,000 on advertising, how (d) If the company increased its price from $950 to $1,000, and (e) If the company decreased its price from $950 to $800, and make it worthwhile? sales numbers fell from 20 to 18, would this be worthwhile? sales numbers increased from 20 to 25, would this be worth- 0 while

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