A company produces gold picture frames. The cost per picture frame is:

Materials $9

Packaging $1

Decorations on the frame $5

Shipping and handling $1.5

Each worker earns $30,000 annually in salary and benefits. The number of workers changes based on the level of production. This means this is a variable cost.

The artist who creates the designs on the picture frames is paid $25,000 annually. Senior management are paid a total of $200,000 annually. Other annual costs are:

Taxes and Insurance $17,000

Utilities $50,000

Rent $300,000

Miscellaneous Overhead Expenses $24,000

The following production is possible:

No. Of Workers	0	1	2	3	4	5	6	7
No. Of Picture Frames that can be made	0	12,000	21,000	35,000	50,000	65,000	73,000	71,000

1. If marketing data showed you could sell the following number of picture frame at the prices indicated, how many picture frames would you produce and what would be your profit? Fill in the chart. (1 mark)

# of Picture Frames	12000	21000	35000	50000	65000	73000	71000
Price (AR)	$40	$38	$36	$33	$30	$28	$26

# of Workers	TR	AR	Q	TC	Profit or Loss (TP)
0
1
2
3
4
5
6
7