Custom Furniture Manufactures a Small Table and a Large Table

question 30

True/False

Custom Furniture manufactures a small table and a large table. The small table sells for $800, has variable costs of $520 per table, and takes eight direct labor hours to manufacture. The large table sells for $1,200, has variable costs of $720, and takes sixteen direct labor hours to manufacture. The small table has a lower contribution margin per unit, but a higher contribution margin per direct labor hour.

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Definitions:

Multiple-Step Income Statement

An income statement that breaks down revenues and expenses into separate categories, such as operating and non-operating, to highlight different aspects of business performance.

Administrative Expenses

Expenses related to the general operations of a business, such as salaries of non-sales personnel and office supplies.

Rent Revenue

Money received for rent.

Purchases Discounts

Reductions in price given by suppliers to businesses when they buy goods or services, often provided for early payment.