This is for an accounting managerial classCurrently, the price of one set is $500 to local gardens. Kay's brother in law, Jim, has considered making himself a patio set and has priced the necessary materials at a building supply store. He asked Kay, if he could purchase a patio set from her company "at cost", and Kay agreed to do so.1. Would you expect any disagreement between Jim and Kay over the price that Jim should pay. Explain. What price does Kay probably have in mind? Jim? Explain how each of them could justify their cost using terminology you have learned.2. What cost term might be justification for Kay to charge the full, regular price to Jim and still be selling "at cost"

Kay Landers owns a company that specializes in producing a set of wood patio furniture, consisting of a table and four chairs. The set is very popular and the company has sufficient orders to keep production going at its full capacity of 2,000 sets per year. Annual cost data at full capacity is as follows: Direct materials (wood, bolts, etc.) $94,000 Direct labor 118,000 Factory supervision 40,000 Advertising 50,000 Property taxes, factory building 3,500 Sales commissions 80,000 Insurance, factory 2,500 Depreciation, admin. Office equipment 4,000 Lease cost, factory equipment 12,000 Indirect materials, factory 6,000 Depreciaticn, factory building 10,000 Administrative office supplies 3,000 Administrative office salaries 60,000 Utilities, factory 20,000 Currently, the price of one set is $500 to local garden stores. Kay's brother-in-law, Jim, has considered making himself a patio set and has priced the necessary materials at a building supply store. He asked Kay if he could purchase a patio set from her company \"at cost,\" and Kay agreed to do so