Stylistic Forniture Inc. produces cabinets. Last year's sales volume totaled PLN 850 thousand. The volume for the first five months of the current year totaled PLN 600 thousands and sales were expected to be PLN 1,6 million for the entire year. Unfortunately, the cabinet business in the region where Stylistic Forniture operates is highly competitive. More than 100 cabinet shops are all competing for the same business.
Stylistic currently offers two different quality grades of cabinets: Grade I and Grade II, with Grade I being the higher quality. The average unit selling prices, unit variable costs, and direct costs are as follows:
Common fixed costs (fixed costs not traceable to either cabinet) are PLN 35 000. Currently, for every three Grade I cabinets sold, seven Grade II cabinets are sold.
a. Calculate the number of Grade I and Grade II cabinets that are expected to be sold during the current year.