Wright Manufacturing
Wright Manufacturing makes picnic tables in three sizes: small, medium, and large. The picnic tables can be sold with or without a finishing stain. The following information is available for each table:
$\begin{array}{lrrr}
&\text { Small }& \text { Medium } & \text { Large }\
\text { Initial sales price } & \$ 60 & \$ 100 & \$ 1 / 5 \
\text { Initial cost } & 20 & 40 & 55 \
\text { Sales price after staining } & 70 & 125 & 210 \
\text { Cost of staining } & 11 & 15 & 20 \
& & & \
\text { Number sold per month } & 100 & 300 & 175
\end{array}$
-Which table(s)should be processed further?

Question

Quizplus · Accepted Answer

The decision to process further should be based on whether the additional revenue from staining exceeds the additional cost. For the medium table, the additional revenue is $25 ($125 - $100) and the cost is $15, resulting in a profit of $10. For the large table, the additional revenue is $55 ($210 - $155) and the cost is $20, resulting in a profit of $35. Therefore, both medium and large tables should be processed further.

Wright Manufacturing Wright Manufacturing Makes Picnic Tables in Three Sizes

Wright Manufacturing
Wright Manufacturing Makes Picnic Tables in Three Sizes