The Lade & Bach Company produces office chairs. The price of the chairs is $99.75 and the variable cost per chair is $49.75. The following fixed costs are incurred:
Depreciation of plant and equipment per year $20,000
Property taxes per year 12,000
Manager's salary and fringe benefits per month 5,200
Perform a breakeven analysis of this company:
a. What is the breakeven point in number of chairs?
b. How many chairs must be sold for the company to make $75,000 in a year?