Native Wood Products Ltd sells hand-made coffee tables. The shop owner has divided sales into two categories according to the type of wood used in the tables, as follows:Product typeKahikateaRimuSales price$2,000$1,200Costs$1,200$520Sales commission$100$60Seventy percent (70%) of the shop's sales are rimu tables. The shop's annual fixed costs are $161,000.How many tables of each type must be sold in order to earn a target net profit of $600,000?

The contribution margin is calculated as difference between sales and variable costs. The break even…

Answered: Native Wood Products Ltd sells…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Native Wood Products Ltd sells hand-made coffee tables. The shop owner has divided sales into two categories according to the type of wood used in the tables, as follows:

Product type	Kahikatea	Rimu
Sales price	$2,000	$1,200
Costs	$1,200	$520
Sales commission	$100	$60

Seventy percent (70%) of the shop's sales are rimu tables. The shop's annual fixed costs are $161,000.

How many tables of each type must be sold in order to earn a target net profit of $600,000?

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