A furniture manufacturer can sell dining room tables for $4,000 each. The manufacturer’s total cost consists of a fixed overhead of $300,000 plus a production costs of $1,000 per table
and the question is....?
To calculate the manufacturer's profit per dining room table, we need to subtract the total cost of producing the table from the selling price.
The fixed overhead cost is $300,000, which remains constant regardless of the number of tables produced.
The production cost per table is $1,000.
So, the total cost per table is the sum of the fixed overhead cost and the production cost, which is $300,000 + $1,000 = $301,000.
To calculate the profit per table, we subtract the total cost per table from the selling price per table.
Profit per table = Selling price per table - Total cost per table
Profit per table = $4,000 - $301,000
Profit per table = -$297,000
Therefore, the manufacturer would incur a loss of $297,000 for each dining room table produced, assuming all tables are sold at the selling price of $4,000 each.