Hello, can someone please help me. I'm new to accounting and i'm having lots of trouble with this question. i need help with question 2 and 4a
Problem 2-3 Identifying Costs, Cost Concepts (LO1 - CC1, 2; LO2 - CC3, 4; LO4 - CC7, 9) The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company has ample orders to keep production going at its full capacity of 3,400 sets per quarter. Quarterly cost data at full capacity follow: Factory labour, direct $ 125,000 Advertising 51,400 Factory supervision 41,400 Property taxes, factory building 4,900 Sales commissions 87,000 Insurance, factory 3,900 Depreciation, office equipment 5,400 Lease cost, factory equipment 13,400 Indirect materials, factory 7,400 Depreciation, factory building 11,400 General office supplies (billing) 4,400 General office salaries 67,000 Direct materials used (wood, bolts, etc.) 101,000 Utilities, factory 21,400Required :` 1 . Enter the dollar amount of each cast item under the appropriate headings . As examples , this has been done already for the first two items in the preceding list . 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 . I'If the item is a product cost , it should also be classified as either direct or indirect as shown .!' Cost Behaviour Selling and Product Cost Cost Item Variable Fixed Administrative Cost Direct Indirect* Factory labour , direct 125, 000 125, 000 Advertising 51, 400 51, 400 Factory supervision $ 1, 400 $ 1, 400 Property taxes , factory building 4, 500 4. 300 Sales commissions $7, 000 Insurance , factory 3.900 3.900 Depreciation , office equipment 5, 400 5, 400 LEASE cast , factory Equipment 13, 400 13, 400 Indirect materials ; factory 7, 400 7, 400 Depreciation , factory building 1 1, 400 1 1, 400 General office supplies ( billing" 4, 400 4, 400| General office salaries 67, 000 OT, OOO Direct materials used ( wood , bolts , Etc ."! 101, 000 101, 000 Utilities , factory 21, 400 21, 400 Total costs 3:46, 200| $ 198, 800 | $ 215, 200 | $ 2 26,000| $ 103,800 "To units of product2. Compute the average product cost per patio set. (Round your answer to 2 decimal places.) Average product cost per patio set 3. Assume that production drops to only 1,000 sets quarterly. Would you expect the average product cost per patio set to increase, decrease, or remain unchanged? Increase O Decrease O Remain unchanged 4. Refer to the original data. The president's brother-in-law has considered making a patio set and has priced the necessary materials at a building supply store. He has asked the president if he could purchase a patio set from the Mahela Company "at cost," and the president has agreed to let him do so. a. Would you expect any disagreement over the price the brother-in-law should pay? What price does the president probably have in mind? (Round your answer to 2 decimal places.) Yes , the president may expect a minimum price of X This is a numeric cell, so please enter numbers only
