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:
$\begin{array}{lrrr}
&\text { Small }& \text { Medium } & \text { Large }\
\text { Initial sales price } & \$ 60 & \$ 100 & \$ 1 / 5 \
\text { Initial cost } & 20 & 40 & 55 \
\text { Sales price after staining } & 70 & 125 & 210 \
\text { Cost of staining } & 11 & 15 & 20 \
& & & \
\text { Number sold per month } & 100 & 300 & 175
\end{array}$
-What is the maximum amount that net income could increase each month with further processing?

Question

Quizplus · Accepted Answer

The maximum amount that net income could increase each month with further processing is calculated by determining the additional profit from staining each type of table and multiplying it by the number sold per month. For each table size, the additional profit per table is the increase in sales price minus the cost of staining. Then, multiply this additional profit by the number of tables sold per month for each size and sum these values.- Small: $(70 - 60) - 11 = -1$, so no increase for small tables as it results in a loss.- Medium: $(125 - 100) - 15 = 10$, additional profit per medium table.- Large: $(210 - 150) - 20 = 40$, additional profit per large table.The initial sales price for the large table seems to be incorrectly listed as \$1 / 5. Assuming it's a typo and meant to be \$150 based on the context of the question:- Medium tables: $10 \times 300 = 3000$- Large tables: $40 \times 175 = 7000$Adding these together: $3000 + 7000 = 10000$.However, none of the provided choices exactly match the calculated increase based on the given data and the assumption made for the large table's initial sales price. The closest provided choice to the calculated value based on the assumption is D) $5625, which suggests there might have been a misunderstanding in the calculation or a mistake in the provided options or data interpretation. Given the options and the data provided, without the correct initial sales price for the large table, a precise calculation is challenging, but the selection process involves calculating the potential increase in net income from staining, which is not directly achievable with the provided numbers.

Wright Manufacturing Wright Manufacturing Makes Picnic Tables in Three Sizes

Wright Manufacturing
Wright Manufacturing Makes Picnic Tables in Three Sizes