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Artistic Woodcrafting Inc. began several years ago as a one-person, cabinet-making operation. Employees were added as the business expanded. Last year, sales volume totaled
Artistic Woodcrafting Inc. began several years ago as a one-person, cabinet-making operation. Employees were added as the business expanded. Last year, sales volume totaled P850,OOO. Volume for the first five months of the current year totaled P600,000, and sales were expected to be Pl.6 million for the entire year. Unfortunately, the cabinet business in the region where Artistic is located is highly competitive. More than 200 cabinet shops are all competing for the same business. Artistic currently offers two different quality grades of cabinets: Grade I and Grade II, with Grade 1 being the higher quality. The average unit selling prices, unit variable costs, and direct fixed costs are as follows: Grade I Grade 11 Unit Price Unit Variable Cost Direct Fixed Cost P3,400 1,600 P2,686 1,328 Common fixed costs (fixed costs not traceable to either cabinet) are P3S,OOO. Grade I cabinets sold, seven Grade II cabinets are sold. pgs,ooo 95,000 Currently, for every three 1. Calculate the number of Grade I and Grade II cabinets that are expected to be sold during the current year.
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