Tour #1: Statton Furniture Company

Rating: ****

Company Overview: A manufacturer of fine cherry furniture produced “one piece at a time”.

Managerial Accounting Topic(s): production costs and quality

Web Site: www.statton.com

To Take the Tour: From the home page, select “Statton Quality,” then click on “Virtual Plant Tour.”

Question: This chapter discusses the concept of Contribution Margin. What type of costs would be variable costs associated with Statton Furniture's products? What might some of their fixed costs be? What would you suspect would occur to Statton's contribution margin and breakeven point if Statton started producing its furniture using more automated (e.g. robotics) methods rather than the more labor-intensive methods it currently uses?