A chair manufacturer has established the following flexible budget for
Units Produced and Sold
a. What is the sales price per chair?
b. What is the expected profit if 1,600 chairs are made?
Different Types of Budgets
The Sticky Company makes a glue that is used to glue the layers of
wood veneer together to make plywood. The process for making the
glue has been used for many years and the customers are satisfied with
the product. The Sticky Company has had very low turnover of
personnel and the president and the managers have all been with the
company for many years. Although the company appears very stable
today, plywood prices are rising and the construction industry is
beginning to switch to a cheaper product called chipboard. Chipboard
uses a different glue than the glue made by the Sticky Company.
Given the present condition of Sticky Company, should the company