As the management accountant for Superior Log Cabins, Inc. you have been asked to attend a planning meeting for the 2019 season. The owner specifically wants to know how many log cabins must be sold to earn a profit of $450,000 in 2019. The company makes three models of cabins: deluxe, standard, and basic. At the end of 2018, the local utility company began charging Superior as a mixed cost: an annual fee plus a variable cost for each kilowatt of power the company uses (rather than solely at a fixed rate). Each cabin type (all three models) requires approximately 8,000 kilowatt hours of electricity. The company needs to add that new utility cost to the projected income statement for 2019. Note that the current fixed cost estimate of $18,000 per cabin type in Table 2 is NOT related to the new utility cost. Cabins are constructed at three separate locations (one for each model), so the utility company will estimate costs separately for each model type. The owner estimates that sales in 2019 will be 25 basic cabins, 35 deluxe cabins, and 55 standard cabins, and they will produce exactly that quantity. The current selling price per unit is $79,000 for basic, $112,000 for deluxe, and $91,000 for standard cabins and will not increase next year. Assume that there are $150,000 of fixed administrative expenses per model and $5,500 of variable selling expenses for each cabin sold, no matter what model it is. The company uses job order costing.

Table 1: 2018 Utility Usage and Costs (based on similar firms' experience)
				Kilowatts	Utility Cost
				187,976	135,356
				219,764	170,000
				196,644	160,000
				143,987	114,000
				156,983	128,000
				115,300	89,000
				156,392	108,000
				125,982	98,000
				151,999	88,000
				170,637	140,000
				294,000	165,000
				184,763	144,000

Table 2: Estimated Costs by Model for 2019

Component	Model	Fixed Costs	Variable Cost per unit	Units	Total Cost
DM Used	Basic		38,000	25	950,000
DL	Basic		28,000	25	700,000
Mfg O/H	Basic	18,000		25	18,000
DM Used	Deluxe		52,000	35	1,820,000
DL	Deluxe		37,000	35	1,295,000
Mfg O/H	Deluxe	18,000		35	18,000
DM Used	Standard		43,000	55	2,365,000
DL	Standard		32,000	55	1,760,000
Mfg O/H	Standard	18,000		55	18,000