Assume the estimated total operating income statement remains the same as given above. The

company is into three different product lines - Cabinet, Tables & Chairs.

The following information are available:

Cabinets Tables Chairs

1. No of units expected 500 800 1500

2. Unit selling price (per unit) 560 125 60

3. Direct material cost 50,000 30,000 40,000

4. Sales expenses 28,000 10,000 9,000

5. Machine hours required (hrs) 18,000 5,000 2,000

6. Weights of the products (Pounds) 8,000 4,000 3,000

7. No of employees reqd.( Nos) 100 50 40

8. Area occupied (sq.feet) 15,000 10,000 7,000

a. Prepare the income statement shoeing the bifurcation between the three

product lines based on some logical assumptions and the data as provided.

b. Which product line contributes the maximum to the profit margins

c. If the company has the option to price the product based on a 10% mark-up on

the total cost, what should be selling product price of each product line, and how

would be income statement for the company look like.