Cost$-$Volume$-$Profit with multiple Products, Sales Mix Changes, Changes in Fixed and variable Costs

John Woodcrafting inc. began several years ago as one$-$person cabinet$-$making operation. Employees were added as the business expanded.

Last year, sales volume totalled $$850,000.$ Volume for the first five months of the current year totalled $$600,000,$ and sales were expected to be $1\mathrm{.}6$ million for the entire year. Unfortunately, the cabinet business in the region where John Woodcrafting inc. is located is highly competitive. More than $200$ cabinet shops are competing for the same business.

John Woodcrafting inc. currently offers two different quality grades of cabinets: Grade $1$ and Grade$-2,$ with Grade $1$ being higher quality. The average unit selling prices, unit variable costs, and direct fixed costs are as follows:

$\backslash$table$[[,$Unit Price,Unit Variable Cost,Direct Fixed Cost$],[$Grade $1,$$$3,400,$$$2,686,$$$95,000$