Vacation first Manufacturing has a factory that produces cabinetry for the RV and marine market. The company has other 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 following information highlights Vacation first Manufacturings cost structure for 2020.

• 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 company estimates that it will have 30,000 direct labor hours in total for the cabinets.
• It assumes 1200 units are sold on average per year.

A breakdown of estimated yearly costs related to the cabinetry follows:

	Salaries- office & administrative				$ 520,000
	Salaries for factory personal				$ 320,000
	Office Rent				$ 150,000
	Factory Rent				$ 30,000
	Office 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. Assuming Vacation first Manufacturing is considering adding another product line molded doors (keeping the cabinet production constant at 1,200 units). How many units should the company sell to make adding the additional line economically feasible/attractive? Adding this line will require hiring a different type of worker which costs the company $15/hour. Vacation first Manufacturing estimated each unit takes 10 hours of labor, and $700 direct materials. This line is estimated to incur additional fixed MOH $456,250 for the year, and variable costs/expenses per unit are the same as the cabinet product line. This product line does not add additional fixed period costs, but shares the fixed period costs with the cabinetry line. The company estimated sales price of a set of doors would be $1,600.