4. Refer to the original data. The president's brother-in-law has considered making a patio set and has priced the necessary materials at a building supply store. He has asked the president if he could purchase a patio set from the Mahela Company at cost, and the president has agreed to let him do so. a. Would you expect any disagreement over the price the brother-in-law should pay? What price does the president probably have in mind? (Round your answer to 2 decimal places.) the president may expect a minimum price of 3. Assume that production increases to only 3,150 sets quarterly. Would you expect the average product cost per patio set to increase, decrease, or remain unchanged? Increase O Decrease O Remain unchanged 2. Based on the answers obtained in Requirement (1), compute the average product cost per patio set. (Round your answer to 2 decimal places.) Average product cost per patio set $ 125,500 $ 125,500 51,500 51,500 Factory labour, direct Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building General office supplies (billing) General office salaries Direct materials used (wood, bolts, etc.) Utilities, factory Total costs $ 125,500 $ 51,500 $ 51,500 $ 125,500 $ 0 *To units of product. Required: 1. Enter the dollar amount of each cost item under the appropriate headings. As examples, this has been done already for the first two items in the preceding list. Note that each cost item is classified in two ways: first, as variable or fixed, with respect to the number of units produced and sold, and, second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect as shown.) Cost Behaviour Product Cost Selling and Administrative Cost Variable Fixed Direct Indirect* $ 125,500 $ 125,500 51,500 51,500 Cost Item Factory labour, direct Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, office equipment The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company is currently operating at 80% of its full capacity of 3,500 sets per quarter. Quarterly cost data at this level of operations follow: Factory labour, direct Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building General office supplies (billing) General office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $125, 500 51, 500 41, 500 5, 000 87, 500 4,000 5, 500 13, 500 7,500 11, 500 4,500 67,500 101, 500 21, 500