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A furniture manufacturer specializes in wood tables. The tables sell for $220 and incur $110 in variable costs. The company has $18,700 in fixed costs

A furniture manufacturer specializes in wood tables. The tables sell for $220 and incur $110 in variable costs. The company has $18,700 in fixed costs per month. Expected sales are 245 tables per month.

17.

Calculate the margin of safety in units.

18.

Determine the degree of operating leverage. Use expected sales.

The company begins manufacturing wood chairs to match the tables. Chairs sell for $44 each and have variable costs of $20. The new production process increases fixed costs to $20,600 per month. The expected sales mix is one table for every four chairs. Calculate the breakeven point in units.

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