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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
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 2,000 sets per year. Annual cost data at full capacity as follow: Direct labor $118,000 Advertising $50,000 Factory supervision $40,000 Property taxes, factory building $3,500 Sales commissions $80,000 Insurance, factory $2,500 Depreciation, administrative office equipment $4,000 Lease cost, factory equipment $12,000 Indirect materials, factory $6,000 Depreciation, factory building $10,000 Administrative office supplies (billing) $3,000 Administrative office salaries $60,000 Direct materials used (wood, bolts, etc.)
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