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As we learned in Problem #5, Flo's Fun Furniture is making coffee tables. Right now, they are making and selling 15,000 of the Oak table,
As we learned in Problem #5, Flo's Fun Furniture is making coffee tables. Right now, they are making and selling 15,000 of the Oak table, but interestingly enough, they're selling it unfinished (it's that awesome). Many of their customers want to buy it finished, but wouldn't be willing to pay more than $450 per table So they want to see if it makes sense to offer it finished in the future. They got the following data together about current selling price, costs and demand for unfinished tables, and expected selling price, costs and demand for finished coffee tables: OAK OAK (UNFINSHED) (FINISHED) SELLING PRICE/UNIT 400.00 450.00 DIRECT MATERIALS/UNIT DIRECT LABOR/UNIT VARIABLE OVERHEAD/UNIT FIXED OVERHEAD/UNIT 40.00 13.50 24.00 3.00 40.00 54.00 31.00 $3.00 EXPECTED DEMAND (UNITS) 15,000 15,000 ADDITIONAL DEVELOPMENT/PROCESSING COSTS 50,000.00 Should they continue to sell it unfinished, or process it further before selling it
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