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The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company is currently operating at
The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company is currently operating at 80% of its full capacity of 3,800 sets per quarter. Quarterly cost data at this level of operations follow: Factory labour, direct $127,000 Advertising 51,800 Factory supervision 41,800 Property taxes, factory building 5,300 Sales commissions 89,000 Insurance, factory 4,300 Depreciation, office equipment Lease cost, factory equipment 5,800 13,800 Indirect materials, factory 7,800 Depreciation, factory building 11,800 General office supplies (billing) 4,800 General office salaries 69,000 Direct materials used (wood, bolts, etc.) 103,000 Utilities, factory 21,800
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