Break-even chart for the custom cabinet firm

Reference no: EM13767410

You are going to open a business making custom cabinets. You can sell each cabinet for $80. It takes a cabinetmaker approximately 45 minutes to make one cabinet. Each cabinetmaker works an 8-hour day earning $18 per hour. Each cabinet uses $25 in raw materials. You usually produce cabinets 20 days a month and can employ two cabinetmakers. You estimate that your fixed costs are $5,000 per month.

a. What is your contribution margin?

b. How many cabinets must you make each month to break even?

c. Construct a break-even chart for the custom cabinet firm.

Reference no: EM13767410

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