The patio sets are normally sold for $400 per set. Dial can increase capacity by 500 units to 2,500 units (from previous capacity of 2,000 units) but must pay $25,000 to do so. Annual cost data for the production of 2,000 sets are classified as follows:
		Cost Behavior		Selling or Administrative						Product Cost
	Cost Item	Variable	Fixed	Cost						Direct	Indirect
	Direct labor.......................................................................	$118,000								$118,000
	Advertising........................................................................		$50,000	$50,000
	Factory supervision...........................................................		40,000								$40,000
	Property taxes, factory building........................................		3,500								3,500
	Sales commissions............................................................	80,000		80,000
	Insurance, factory..............................................................		2,500								2,500
	Depreciation, administrative office equipment.................		4,000	4,000
	Lease cost, factory equipment...........................................		12,000								12,000
	Indirect materials, factory.................................................	6,000									6,000
	Depreciation, factory building..........................................		10,000								10,000
	Administrative office supplies..........................................	3,000		3,000
	Administrative office salaries...........................................		60,000	60,000
	Direct materials used.........................................................	94,000								94,000
	Utilities, factory.................................................................	20,000									20,000
	Total costs.........................................................................	$321,000	$182,000	$197,000						$212,000	$94,000

	Total at 2,000 Units	Per unit
Sales	$800,000	$400
Variable Cost	$321,000	$160.50
Contribution Margin	$479,000	$239.50
Fixed Cost	$182,000	$182,000
Operating Income	$297,000	$148.50

2.Do total fixed costs change if units change from 1,000 to 2,000 units? Why or why not? Please mention the concept of relevant range in your answer. What is the variable cost per unit and what are the total variable costs for 2,000 units? 4.) For the following questions, please use the information on pages 1 and 2 to help support your decisions. Please document your answer in a clear, concise way and reference any numbers that were used to make your decision. Each question is independent and refers to the original data unless specified otherwise. For each question, please use up to 100 words. Each question is worth 5 points for a total of 20 points.