The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of 3,900 sets per year. Annual cost data at full capacity follow:

Direct labor	$ 92,000
Advertising	$ 102,000
Factory supervision	$ 72,000
Property taxes, factory building	$ 15,000
Sales commissions	$ 59,000
Insurance, factory	$ 7,000
Depreciation, administrative office equipment	$ 3,000
Lease cost, factory equipment	$ 16,000
Indirect materials, factory	$ 19,000
Depreciation, factory building	$ 108,000
Administrative office supplies (billing)	$ 3,000
Administrative office salaries	$ 112,000
Direct materials used (wood, bolts, etc.)	$ 428,000
Utilities, factory	$ 45,000

Required:

1. Enter the dollar amount of each cost item under the appropriate headings. 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. (If the item is a product cost, it should also be classified as either direct or indirect.)

2. Compute the average product cost of one patio set. 3. Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged?

Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Enter the dollar amount of each cost item under the appropriate headings. 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. (If the item is a product cost, it should also be classified as either direct or indirect.) Period ( Selling Cost Item Variable Cost Fixed Cost or Direct Product Indirect Behavior Behavior Administrative) Cost Product Cost Cost Direct labor $ 92,000 $ 92.000 Advertising 102,000 102,000 Factory supervision 72,000 72,000 Property taxes, factory building 15,000 15,000 Sales commissions 59,000 59,000 Insurance, factory 7,000 7,000 Depreciation, administrative office equipment 3,000 3,000 Lease cost, factory equipment 16,000 16,000 Indirect materials, factory 19,000 19,000 Depreciation, factory building 108,000 108.000 Administrative office supplies (billing) 3,000 3,000 Administrative office salaries 112,000 112,000 Direct materials used (wood, bolts, etc.) 428,000 428,000 Utilities, factory 45,000 45,000 Total costs $ 646,000 $ 435,000 $ 279,000 $ 520,000 $ 282,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the average product cost of one patio set. (Round your final answer to nearest whole dollar.) Average product cost per set Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged? OIncrease ODecrease ORemain unchanged