Case 1-26 (Algo) Cost Classification and Cost Behavior (L01-1, L01-2, L01-3, LO1-4] 1 The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 4,100 sets per year. Annual cost data at full capacity follow: 10 points References Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 92,000 5 98,000 $ 68.000 5 16,000 $ 55,000 $ 5,060 $ 2,000 $ 17,000 $ 20,eee $ 105,000 $ 5,000 $ 110,000 $430,000 $ 44,00 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. 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) 2. Compute the average product cost of one patio set. 3. Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged? Complete this question by entering your answers in the tabs below. 1 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 10 Don Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: fixed with respect to the number of units produced and sold; and second, as a selling and administrative cont or a product cost product cost, it should also be classified as either direct or indirect.) Reference Cost Behavior Product Cost Period (Selling Administrative) Cost Varlatile Fixed Direct Indirect Costi Direct labor Advertising Factory supervision Property taxes factory building Sales commissions Insurance factory Depreciation, administrative office equipment Lease cont factory equipment Indirect materials factory Depreciation factory building Administrative office supplies (tilling) Administrative office salles Direct materials used (wood bollte U factory Totalcouts Required 2 > Required: 1. Enter the dollar amount of each cost item under the appropriate headings. 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) 2. Compute the average product cost of one patio set 3. Assume that production drops to only 1000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the average product cost of one patio set. Round your final answer to nearest whole dollar Average product cost per set Required: 1. Enter the dollar amount of each cost item under the appropriate headings. 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) 2. Compute the average product cost of one patio set. 3. Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease or remain unchanged? Increase Decrease Remain unchanged