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 3.800 sets per quarter. Quarterly cost data at this level of operations follow: d 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 $127,000 51,800 41,300 5.100 9,000 4,300 5,600 13,600 7,100 11,800 4,800 69,000 103,000 21,600 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 seling 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 Item Factory labour direct Advertising Factory supervision Cost Behaviour Selling and Administrative Variable Fixed Cost 127.000 51.800 51 800 Product Cont Direct Indirect 127,000 $ to search o i 14 C C G 20'C Mostly doudy ASUS VIVOBO 20 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 foed, with respect to the number of units produced and sold and second, as a seling 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) 5 Cost Behaviour Selling and Administrative Variable Fixed Cost $ 127.000 51.800 51,800 Product Cost Direct Indirect 127.000 cBook 5 ferences Cost Item Factory about 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 (bling General otice salarios Direct materials used wood bolts, etc Utilities, factory Total costs "To units of product $ 127.000 s 51.500 5 51.800 $ 127,000 $ - 20C Mos here to search o 14 u 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 productes per patio set 3. Assume that production increases to only 3,420 sets quarterly. Would you expect the average product cost per patio setto increase, decrease, or remain unchanged? O Increase O Decrease O Remain unchanged 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. o. 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 pendent may expect a minimum price of 8 20'C Mos to search C ASUS VIVOBOO O . neries were mys as a were se ne 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 taw should pay? What price does the president probably have in mind? (Round your answer to 2 decimal places.) ma nos of Sook 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? Opportunity cost Sunk cost Relevant cost ere to search o 20C Mostly cloudy BD VIVIA BUON