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The Outdoor Dining Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity,
The Outdoor Dining Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity, and the company has ample orders to keep production going at its full capacity of 2,100 sets per year. Annual cost data at full capacity follow: Direct labour $122, 600 Advertising $ 45, 300 Factory supervision 47 , 500 Property taxes, factory building 3, 100 Sales commissions 90, 900 Insurance, factory 2,200 Depreciation, administrative office equipment 4, 200 Lease cost, factory equipment 13, 500 Indirect materials, factory 6,200 Depreciation, factory 10, 300 Administrative office supplies $ 3, 400 Direct materials used (wood, bolts, etc. ) $102, 000 Utilities, factory $ 22, 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 either variable or fixed with respect to the number of units produced and sold, and second, as either 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.) Cost Behavior Selling and Product Cost Administrative Cost Item Variable Fixed Cost Direct Indirect Direct labour Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factoryRequired: 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 either variable or fixed with respect to the number of units produced and sold, and second, as either 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.) Cost Behavior Selling and Product Cost Administrative Cost Item Variable Fixed Cost Direct Indirect Direct labour Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory Administrative office supplies Direct materials used (wood, bolts, etc.) Utilities, factory Total costs2. Compute the average product cost per patio set. (Round your answer to 2 decimal places.) _ per patio set 3. Due to reduced demand, assume that production drops to only 1,000 sets per year. Would you expect the average product cost per patio set to increase, decrease, or remain unchanged? A Increase C Decrease C Remain unchanged 4. This part of the question is not part of your Connect assignment
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