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Question 1
Kane Lifestyle is planning to manufacture "Majesty" tables, a high end designer dining table. Below is a breakdown of their projections for the current year
Expected Sales 450 "Majesty" tables
Selling Price $16,000/table
Direct Materials per table 110kg of wood @ $45/kg wood
Direct Labour per table 24 hours labour @ $30/hr
Sales Commission 1.5% of sale price
Total Fixed Costs $2,600,000
Kane Lifestyle are considering adding a marketing campaign to increase sales. They have budgeted $500,000 for the campaign and estimate that sales may increase by 16%. What will be the effect on breakeven units and profit? Please show all calculation
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