Question
Muskoka Comforts makes chairs. The cost to manufacture an unfinished chair is: Direct materials $ 8.40 Direct labour 7.20 Variable manufacturing overhead 4.80 Fixed manufacturing
Muskoka Comforts makes chairs. The cost to manufacture an unfinished chair is:
Direct materials $ 8.40
Direct labour 7.20
Variable manufacturing overhead 4.80
Fixed manufacturing overhead 3.60
Total manufacturing costs $24.00
The sales price for an unfinished chair is $55.00 and the sales price for a finished chair is $65.00. Muskoka Comfort would incur an additional $1.60 for direct materials, $1.80 for direct labour, and $1.20 for variable manufacturing overhead to finish the chairs.
Instructions: Should the company sell the unfinished product or process further?
*inserting a table may help you here
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