At the end of October, Michelle lamented the company's situation: in the middle of production of Wildhorse-T's most popular long- sleeve T-shirt, the company ran out of its usual collars, purchased from one main supplier. That supplier was also sold out. Wildhorse-T could get a slightly different premade collar, from a new supplier, at the same cost. So Michelle went ahead with the order, hoping it wouldn't delay production or affect the quality of the shirts. As it turned out, the new collars failed Wildhorse-T's quality control testing. Stuck with unwearable T-shirts, the company was also in a bind with its retail outlets, which wanted more shirts to sell! The costs to produce this most recent batch of shirts is as follows. Direct material Direct labor Manufacturing overhead $77,000 37,000 17,000 Total costs $131,000 Volume in batch 20,000