How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask PDtax Your Own Question
PDtax
PDtax, CPA, MBA
Category: Finance
Satisfied Customers: 4183
Experience:  Tax professional and business consultant for 35 years.
64119565
Type Your Finance Question Here...
PDtax is online now
A new question is answered every 9 seconds

You are going to open a business making custom cabinets

Customer Question

You are going to open a business making custom cabinets
Submitted: 1 year ago.
Category: Finance
Customer: replied 1 year ago.
You are going to open a business making custom cabinets. sell each cabinet for$80 it take the cabinet maker 45 minutes to make each cabinet. you have two cabinet makers $18 per hour 8 hour days. they work 20 days a month. Each cabinet cost $25 raw material and you have monthly fixed cost of $5000.
I need contribution margin
break even analysis per month
what is your total monthly revenue if you want to earn $2000 per month
Expert:  PDtax replied 1 year ago.

Hi. I'm PDtax, and will assist.

Expert:  PDtax replied 1 year ago.

Breakeven per month:

Sales ($80) - direct labor ($25) = $55 per unit

direct labor commitment ($18*2*8*20)=$5760/month

fixed costs: $5,000

Breakeven per month: ($5760+$5000)/(80-25)

$10760/55 = 196 units per month:

Proof: sales (196*80)=15680

DM (196*25) (4900)

DL (5760)

Fixed costs (5000)

profit $20 (rounding)

Expert:  PDtax replied 1 year ago.

Part 2: For a profit of $2,000 per month:

(5760+5000+2000)/55 = 232 units.

Sales: 232*80=$18,560.

Proof:

Sales 18560

DM (232*25)=(5800)

DL (5760)

FC (5000)

profit (2000)

sum $0

Expert:  PDtax replied 1 year ago.

Thanks from Just Answer. Positive feedback is appreciated. I'm PDtax.

Expert:  PDtax replied 1 year ago.

Hi again. If this meets your needs, positive feedback is appreciated. I'm PDtax..