furniture consisting of a table and four chairs. The set enjoys great The Walnut Company specializes in producing a set of wood patio popularity and the company has orders of 10,000 sets per year. Annual Cost Identification PI- cost data, at this level of production, follows. Advertising Factory labor, direct Salaries, office Depreciation, factory Office supplies (billing) Sales commissions Utilities, factory Direct materials used Rent, office Insurance, factory Indirect labor $ 40,000 130,000 90.000 45,000 5,000 150,000 65,000 80,000 20,000 10,000 20,000 50,000 15,000 Property taxes, factory Depreciation, office equipment Required: 1) Prepare an answer sheet with the column headings shown below. Each amount will be placed in either the variable or fixed column and each amount will be placed in one of the three columns to the right. Indirect product cost = overhead. Selling or Cost Behavior Administrative Variable Fixed Cost Direct Advertising $ 40,000 $ 40,000 Factory labor, direct $ 130,000 $ 130,000 Product Cost Indirect (OH) 2) Total each column. 3) Compute the average cost to make one patio set. 4) If production dropped, from its current level of 10,000 sets to 8,000 sets, would you expect the cost to make one set to increase, decrease, or stay the same? Why