06 Dec Artistic Woodcrafting, Inc., began in 2002 as a on
Artistic Woodcrafting, Inc., began in 2002 as a one-person cabinet-making operation. Employees were added as the business expanded. By 2005, sales volume totaled$850,000. Volume for the first five months of 2006 totaled $600,000, and sales were expected to be $1.6 million for the entire year. Unfortunately, the cabinet business in the region where Artistic Woodcrafting is located is highly competitive. More than 200 cabinet shops are all competing for the same business.Artistic currently offers two different quality grades of cabinets: Grade I and Grade II, with Grade I being the higher quality. The average unit selling prices, unit variable costs, and direct fixed costs are as follows: Unit Price Unit Variable Cost Direct Fixed Cost Grade I $3,400 $2,686 $95,000 Grade II 1,600 1,328 95,000Common fixed costs (fixed costs not traceable to either cabinet) are $35,000. Cur- rently, for every three Grade I cabinets sold, seven Grade II cabinets are sold. Required1. Calculate the Grade I and Grade II cabinets that are expected to be sold during 2006.2. Calculate the number of Grade I and Grade II cabinets that must be sold for the company to break even.3. Artistic Woodcrafting can buy computer-controlled machines that will make doors, drawers, and frames. If the machines are purchased, the variable costs for each type of cabinet will decrease by 9 percent, but common fixed costs will increase by $44,000. Compute the effect on operating income in 2006, and also calculate the new break-even point. Assume the machines are purchased at the beginning of the sixth month. Fixed costs for the company are incurred uni- formly throughout the year.4. Refer to the original data. Artistic Woodcrafting is considering adding a retail outlet. This will increase common fixed costs by $70,000 per year. As a result of adding the retail outlet, the additional publicity and emphasis on quality will allow the firm to change the sales mix to 1:1. The retail outlet is also expected to increase sales by 30 percent. Assume that the outlet is opened at the begin- ning of the sixth month. Calculate the effect on the company’s expected profits for 2006, and calculate the new break-even point. Assume that fixed costs are incurred uniformly throughout the year.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.