Furniture Classics makes outdoor furniture from aged wood. The
company’s primary product lines are chairs and tables.
Below is data for the recent quarter:
Chairs
Tables
Total
Quantity sold
8,000
1,500
Revenue
$800,000
$375,000
$1,175,000
Direct materials
288,000
140,625
428,625
Direct labor
192,000
46,875
238,875
Contribution margin
$320,000
$187,500
$507,500
Traceable fixed costs
125,000
100,000
225,000
Allocated fixed costs
75,000
75,000
150,000
Profit before taxes
$120,000
$12,500
$132,500
To encourage sales of tables, management is considering
rewarding the salesperson who...