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The Furniture Company manufactures wood kitchen tables. The company will often hire underemployed individuals and provide them the carpentry skills in order for them to
The Furniture Company manufactures wood kitchen tables. The company will often hire underemployed individuals and provide them the carpentry skills in order for them to obtain higher paying employment in the future. Each table requires 10 board feet of lumber plus fittings, which cost $20 per board foot and fittings of $50 per table. Direct labour paid is $20 per hour, and it takes 12 hours to make each table. The facility in which the tables are made is rented for $2,500 per month. Depreciation for all the manufacturing equipment in the production facility for the plant is $1,000 per month. Other production and administrative overhead (all of which is fixed cost) is \$5,000 per month. Each table is sold for $990. Average monthly sales are 25 tables per month. Required Calculate the following: variable cost per table, contribution margin per table, total fixed cost per month, and monthly break even in units and sales dollars. Explain how you would use the information of break-even in the running of this business
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