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The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs that sell for $403. The company has enough

The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs that sell for $403. The company has enough customer demand to justify producing its full capacity of 3,800 sets per year. Annual cost data at full capacity follow:

Direct labor $ 91,000
Advertising $ 97,000
Factory supervision $ 75,000
Property taxes, factory building $ 24,000
Sales commissions $ 62,000
Insurance, factory $ 5,000
Depreciation, administrative office equipment $ 1,000
Lease cost, factory equipment $ 16,000
Indirect materials, factory $ 18,000
Depreciation, factory building $ 103,000
Administrative office supplies (billing) $ 3,000
Administrative office salaries $ 109,000
Direct materials used (wood, bolts, etc.) $ 432,000
Utilities, factory $ 43,000image text in transcribedimage text in transcribed
a) Summarize the costs into the table below. This is the ORIGINAL cost structure. (Refer to item 6 of Lecture Packet 1.1). Remember to calculate the "per unit" amounts using the full capacity given in your connect question. b) Dorilane Company is planning a significant expansion in its operations. The relevant range of the ORIGINAL cost structure won't allow Dorilane Company to produce more than 5,000 sets/units of furniture. This will not accommodate the production volumes needed to support the planned expansion. Dorilane expects the following changes to the cost structure such that the company can produce between 4,000 and 10,000 sets/units. Calculate the NEW cost structure for Dorilane Company. The Company plans to increase their sales price by $40 per set. (Sales price per unit provided in CONNECT Q3 of HW1.1) (Refer to Lecture Packet 1.2 item 1b for demonstration)

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