Case: The Dial Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity, and the company has ample orders to keep production going at its full capacity of 2,000 sets per year. Annual cost data at full capacity follow: Direct labor $118,000 Advertising $50,000 Factory supervision . . . . $40,000 Property taxes, factory building $3,500 Sales commissions . . . . . $80,000 Insurance, factory . . . . . . . $2,500 Depreciation, administrative office equipment . $4,000 Lease cost, factory equipment $12,000 Indirect materials, factory . . ... $6,000 Depreciation, factory building ...... $10,000 Administrative office supplies (billing) . . .. . . $3,000 Administrative office salaries . . . . . . . . . . $60,000 Direct materials used (wood, bolts, etc.) $94,000 Utilities, factory . . . . . . . $20,000The patio sets are normally sold for $400 per set. Dial can increase capacity by 1,000 units to 3,000 units but must pay $50,000 to do so. Annual cost data for the production of 2,000 sets are classified as follows: Selling or Cost Behavior Administrative Product Cost Cost Item Variable Fixed Cost Direct Indirect Direct labor ... $118,000 $118,000 Advertising ........ $50,000 $50,000 Factory supervision....... 40,000 $40,000 Property taxes, factory building...................4......."; 3,500 3,500 Sales commissions ...... 80,000 80,000 Insurance, factory ... 2,500 2,500 Depreciation, administrative office equipment ...... 4,000 4,000 Lease cost, factory equipment ...... 12,000 12,000 Indirect materials, factory .........4..4.....:" 6,000 6,000 Depreciation, factory building. 10,000 10,000 Administrative office supplies. 3,000 3,000 Administrative office salaries ........... 60,000 60,000 Direct materials used ...... 94,000 94,000 Utilities, factory ....... 20,000 20,000 Total costs........ $321000 $182 000 $197.000 $212.000 $94.000 O3) If demand for 2020 is instead 3,000 units should the company pay to increase their capacity? Why? Please explain your calculations and reference to the chart in Figure 1. Assume units are sold at the normal price. Hint: If you expand capacity, you will have to pay additional fixed costs of $50,000. Remember that fixed costs are fixed within the relevant range. If you expand capacity then you are outside this range. If you expand capacity then you can make revenue on 1,000 additional units at the normal price and would pay variable costs on 1,000 additional units. Please consider the incremental profit or loss of expanding capacity. If the incremental profit of expanding capacity is positive then you should do so