Premium Textiles produces basic and premium bed sheets. The basic bed sheet is sold at $20 each, and the premium bed sheet is sold at $40 each. The variable cost of making the basic bed sheet is $12 each. It costs an extra $8 to make the premium bed sheet. It takes 8 labor hours to produce 100 basic bed sheets and 12 labor hours to produce 100 premium bed sheets. There are 2,500 hours of labor time available for production each week. The maximum weekly sales for the basic and premium bed sheets are 5,000 and 2,000 units, respectively. Fixed production costs total $300,000 per year. All selling costs are fixed.

Required: (a) Calculate the optimal production level in number of units for each product. (b) Prepare a trial balance for the company based on the optimal production level. (c) Compute the total fixed and variable costs.