Rattata Co. makes and sells wood bookshelves. Each bookshelf requires 20 feet of lumber ($15 per foot) and accessories ($50). Factory workers are paid $25 per hour to make the bookshelves and each bookshelf takes four labour hours to finish. In each month, Rattatas fixed costs include: rent $2,000, depreciation of plant and equipment $100, and other production and administrative overhead $5,400. Rattata sells the bookshelves for $950 each and the average monthly sales volume is 20 bookshelves.

a. Calculate variable cost per bookshelf and contribution margin per bookshelf.

b. How many bookshelves must Rattata sell each month to break even?

c. How many bookshelves must Rattata sell each month to make an operating profit of $5,000?

d. If Rattata increased its price from $950 to $1,000, and sales numbers fell from 20 to 18, would this be worthwhile?