Problem 1 The J. Page Fumiture Company has the following information available regarding costs at various levels of monthly production. Note that the company's total maximum productive capacity is 30,000 units: Direct materials $32,000 Total Cost $72,000 $100,000 Direct labor 40,800 91,800 127,500 Indirect materials 45,380 101.480 140,750 Supervisors' salaries 12,000 12,000 12,000 Depreciation on plant and equipment 8,000 8,000 8,000 Maintenance 26,350 58,350 80,750 Utilities 6,800 14,300 19,550 Insurance on plant and equipment 1,600 1,600 1,000 Property taxes on plant and equipment 48.000 108.000 150.000 Total $220.00 $467.530 $640.150 Units produced 8.000 Units 18.000 Ups 25.000 Units Required a For each cost component above, determine whether its cost is a 1) Variable cost item, 2) Fixed cost item, or 3) Mixed cost tem b. Using the high-low method, develop a total cost estimation equation for total monthly production costs. c. Using your equation from b. above, predict total costs for a monthly production volume of 1) 6,000 units, 2) 15,00 units, and 3) 28,000 units d. Given the above information, the sales manager estimates that 3-month average per unit cost $26.05 and that at 35,000 units of production, total production cost will approximate $911,750. Do you agree with the sales manager? Please explain your answer.