The following additional data have been supplied by the company:Direct labour is a variable cost at Heritage Garden Furniture.b. All of the company's products are manufactured in the same facility and use the same equipment. Building rent,maintenance, and depreciation are allocated to products using various bases. The equipment does not wear outthrough use; it eventually becomes obsolete.c. There is ample capacity to fill all ordersd. Dropping the model C3 lawn chair would have no effect on sales of other product lines.e. Inventories of work in process or finished goods are insignificant.f. Shipping costs are traced directly to products.g. General administrative expenses are allocated to products on the basis of sales dollars. There would be noeffect on the total general administrative expenses if the model C3 lawn chair were dropped.h. If the model C3 lawn chair were dropped, the product manager would be laid off.Question What would sales of the model C3 lawn chair have to be, at minimum, in order to justify retaining the products? ( hint: set this up as a break-even problem, but include only the telecasts cost from part 1. ( round contribution margin ratio to 2 decimal places and final answer right the nearest whole number

Help D ezto.mheducation.com P E P P f D2L ter 9 i Saved Help Save & Exit Check m Tracey Douglas is the owner and managing director of Heritage Garden Furniture Ltd., a South African comp that makes museum-quality reproductions of antique outdoor furniture. Tracey would like advice concerning advisability of eliminating the model C3 lawn chair. These lawn chairs have been among the company's best- products, but they seem unprofitable. A condensed statement of operating income for the company and for the model C3 lawn chair for the quarter ended June 30 follows: Model C3 All Lawn Chair Products Sales R1, 200, 000* R5, 600, 000 Cost of sales: Direct materials 480, 000 1, 456, 000 Direct labour 288, 000 1, 288, 000 Fringe benefits (20% of direct labour) 57, 600 257, 60 Variable manufacturing overhead 14, 400 56 , 000 Building rent and maintenance 15, 600 56, 000 Depreciation 76, 800 140, 000 Total cost of sales 932, 400 3, 253 , 600 Gross margin 267, 600 2, 346, 400 Selling and administrative expenses: Product managers' salaries 39, 600 140, 000 Sales commissions (5% of sales) 60, 000 280, 000 Fringe benefits (20% of salaries and commissions) 19, 920 84 , 000 19, 000 224, 000 Shipping 192, 000 896, 000 General administrative expenses 330, 520 24 , 000 Total selling and administrative expenses R (62, 920) R 722, 400 Net operating income (loss) *The currency in South Africa is the rand, denoted here by R. The following additional data have been supplied by the company: 24,577 MAF 4 stv 1 4 24