Question: Problem 9-44 Comprehensive; multiproduct Natures Own makes three types of wood flooring: Oak, Hickory, and Cherry. The companys tax rate is 40 percent. The following
Problem 9-44
Comprehensive; multiproduct
Natures Own makes three types of wood flooring: Oak, Hickory, and Cherry. The companys tax rate is 40 percent. The following costs are expected for 2014:
| Oak | Hickory | Cherry | ||
| Variable cost ( per yd2 ) | ||||
| Direct Material | $10.40 | $6.50 | $17.60 | |
| Direct Labor | $3.60 | $0.80 | $12.80 | |
| Production Overhead | $2.00 | $0.30 | $3.50 | |
| Selling Expense | $1.00 | $0.50 | $4.00 | |
| Administrative Expense | $0.40 | $0.20 | $0.60 | |
| Fixed Overhead | $760,000 | |||
| Fixed Selling Expense | $240,000 | |||
| Fixed Administrative Expense | $200,000 |
Per-square-yard expected selling prices are as follows: Oak, $32.80; Hickory, $16.00; and Cherry, $50.00. The expected sales mix is as follows:
| Oak | Hickory | Cherry | |
| Square Yards: | 9,000 | 72,000 | 6,000 |
If the company wants to earn pre-tax profit of $800,000, how many square yards of each type of flooring would it need to sell? Round your computations and final answers to the next highest whole unit.
| Oak | ___________ square yards |
| Hickory | ___________square yards |
| Cherry | ___________square yards |
I don't really know how to go about this one. Please help. Thank you !
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