The Mahela Company specializes in producing sets of wooden patio furniture consisting of a table and four chairs. The company is currently operating at 80% of its full capacity of 3.300 sets per quarter. Quarterly cost data at this level of operations follow: Factory labour, direct Advertising Factory supervision $124,500 51,300 41,300 Property taxes, factory building 4,800 Sales commissions 86,500 Insurance, factory. 3,800 Depreciation, office equipment 5,300 Lease cost, factory equipment 13,300 Indirect materials, factory 7,300 Depreciation, factory building 11,300 General office supplies (billing) 4,300 General office salaries 66,500 Direct materials used (wood, bolts, etc.) Utilities, factory 100,500 21,300 Required: 1. Enter the dollar amount of each cost item under the appropriate headings. As examples, this has been done already for the first two Items in the preceding list. 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 as shown.) Cost Behaviour Cost Item Variable $ 124,500 Factory labour, direct Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory. Depreciation, office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building General office supplies (billing) General office salaries Direct materials used (wood, bolts, etc). Utilities, factory Total costs "To units of product Fixed 51,300 Selling and Administrative Cost $ 51,300 Product Cost Direct 124,500 Indirect 2. Based on the answers obtained in Requirement (1), compute the average product cost per patio set. (Round your answer to 2 decimal places.) Average product cost per patio set 3. Assume that production increases to only 2,970 sets quarterly. Would you expect the average product cost per patio set to increase. decrease, or remain unchanged? O Increase O Decrease O Remain unchanged it niced the necessary materials 4. Refer to the original data. The president's brother-in-law has considered making a patio set and has priced the necessary materials at a building supply store. He has asked the president if he could purchase a patio set from the Mahela Company "at cost," and the president has agreed to let him do so. a. Would you expect any disagreement over the price the brother-in-law should pay? What price does the president probably have in mind? (Round your answer to 2 decimal places.) the president may expect a minimum price of b. Since the company is operating below its full capacity, what cost term used in the chapter might be the most applicable in this situation? O Opportunity cost O Sunk cost O Relevant cost