Question $8(3$ points$)$

$$

Rounding Rules:$$

For units, round up to the next whole unit.$$

Examples:

If your answer is $11,248\mathrm{.}4689$ units, enter $11249$

If your answer is $11,248\mathrm{.}5175$ units, enter $11249$

If your answer is $11,248\mathrm{.}0010$ units, enter $11249$

QUESTION:

Fancy Chair Inc. $($FCI$)$ has manufactured one chair model in recent years, the Comfochair.$$ It is a one of a kind chair, with really cool cup holders, mini fridge, and lamp built in$.$ The fridge can hold up to $4$ sodas.$$ It is a very good product and was featured recently in a sports magazine.$$ Financial information relating to the company and product for next year is provided below.

Financial details per unit:

Selling price$$480$Variable selling cost$38$Variable overhead cost$24$Direct labour cost$105$Direct material cost$235$

Next year, FCI expects to make and sell $19,800$ Comfochairs.$$ It is expected to be a very good year due to the latest fad of people watching sports from home instead of attending live games.$$ Fixed administrative costs are expected to total $$581,000$ and fixed manufacturing costs are expected to total $$318,000.$

Required:$$Calculate FCI's expected margin of safety in units for next year.

Your Answer: