Problem 2-20 Cost Classification and Cost Behaviour (LO1, LO2, LO5, LO6] The Outdoor Dining Company

Problem 2-20 Cost Classification and Cost Behaviour (LO1, LO2, LO5, LO6] 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 4,000 sets per year. Annual cost data at full capacity follow: 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 $ 90,000 $ 101,600 $ 69,000 $ 24,000 $ 60,000 $ 5,000 $ 1,000 $ 19,000 $ 21,000 $ 106,000 $ 4,000 $ 434,000 $ 41, 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 variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost of a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.) < Prey 2 of 5 !! Next > ENG 20 LRS ge Chapter 2 assignment i Saved Help Save & Exit Sub 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 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.) 10 Cost Behavior Variable Fixed Selling or Administrative Cost Product Cost Direct Indirect points eBook Ask Print Cost Item 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 building Administrative office supplies Direct materials used Utilities, factory Total costs rou 2 of 5 Next > Total costs Help Save & Exit 2. Compute the average product cost per patio set. (Round your answer to nearest whole dollar.) Average product cost per set 3. 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? Increase Decrease Remain unchanged

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