A company produces chairs. The cost per chair is: Materials $15 Packaging $1.00 Decorations $5 Shipping and handling $10.00 Each worker earns $28,500 annually in salary and benefits. The number of workers changes based on the level of production. This means this is a variable cost. The artist who creates the designs on the chairs is paid $17,500 annually. Senior management are paid a total of $300,000 annually. Other annual costs are: Taxes and Insurance $17,000 Utilities $60,000 Rent $400,000 Miscellaneous Overhead Expenses $24,000 The following production is possible: No. Of 0 2 3 4 5 6 7 Workers No. Of 0 12,000 24,000 31,000 46,000 54,000 63,000 59,000 chairs that can be made Question 1 (6 marks) Using all this information complete the following table and answer the questions. It would be easier if you set this up in an Excel spreadsheet. When you are done, you must submit it as a Word document with your answers. You will use this table to answer questions 2 and 3 Your first step is to identify which are fixed costs and which are variable costs. If you have to keep paying some costs whether you produce 0 units of the product or 10,000 units, then they are fixed costs. In the short run you have to keep paying fixed costs. In the long run you may be able to change these fixed costs. A variable cost changes based on how much of the product you produce. But the variable costs may not change all at the same time. Marginal cost measures the change between two numbers, so you will be calculating 7 numbers, using the 8 levels of workers. The answers in your table must be calculated to two decimal places. Remember there is a sample assignment in Module 9. This would give you some practice before completing this assignment that will be marked. # of Q TVC AVC AFC MC TC ATC workers TVC / Q FC/ Q FC + VC TC/Q ATC AQ 0 0 1 1000 2 24000 3 31000 46000 5 54000 63000 59000