Question: Classic Cabinets has a factory that produces cabinetry for the RV and marine market. It has multiple product lines.

Materials and labor for the cabinets are determined by each job. To simplify the assignment, we will assume the following average costs.

-The materials include $2,400 for the wood and other materials on a per job basis.

-It requires 25 hours of labor on average for the cabinetry. The hourly rate is $10.

-The sales price will be set at a markup of 95%.

-The companyestimatesthat it will have 30,000 direct labor hours in total for the kitchen cabinets.

-It assumes 1200 units are sold on average per year.

A breakdown of estimated yearly costs related to the kitchen cabinets follows:

Salaries- office & administrative

$ 520,000

Salaries for factory personal

$ 320,000

Office Rent

$ 150,000

Factory Rent

$30,000

Utilities and Misc office expenses(based on units sold)

$20,000

Sales Travel(based on units sold)

$24,000

Insurance - office

$12,000

Depreciation - office equipment

$40,000

Depreciation for factory equipment

$70,000

Advertising

$20,000

Sales commissions(based on units sold)

$45,000

Factory Property taxes

$16,000

Maintenance for factory equipment

$80,000

1). Make job order cost sheet for the following custom project: Material $6,500 and 30 hours of labor. Calculate the sale price based on your cost calculation.

2). What is the contribution margin (CM) in total and per unit dollar, and CM % for the sale 1,200 units?

3). Make a traditional Income Statement assuming a volume of $1,200 units.