Analytical Thinking $($Algo$)[$LO$1-1,$ LO$1-2,$ LO$1-3,$ LO$1-4]$

The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough customer demand to justify producing its full capacity of $3,900$ sets per year. Annual cost data at full capacity follow:

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.$)$

$2.$ Compute the average product cost of one patio set.

$3.$ Assume production drops to only $1,000$ sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged? 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.$)$

$\backslash$begin$\{$tabular$\}\{|$c$|$c$|$c$|$c$|$c$|$c$|$c$|$c$|$c$|$c$|$c$|$c$|\}$

$\backslash$hline $\backslash$multirow$\{2\}\{*\}\{$Cost Item$\}$ & $\backslash$multicolumn$\{3\}\{|$r$|\}\{$Cost Behavior$\}$ & & $\backslash$multicolumn$\{2\}\{|$l$|\}\{\backslash$multirow$[$t$]\{2\}\{*\}\{$Period $($Selling or Administrative$)$ Cost$\}\}$ & $\backslash$multicolumn$\{5\}\{|$c$|\}\{$Product Cost$\}\backslash \backslash$

$\backslash$hline & Variable & & Fixed & & & & & Direct & & & $\backslash \backslash$

$\backslash$hline Direct labor & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Advertising & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Factory supervision & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Property taxes, factory building & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Sales commissions & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Insurance, factory & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Depreciation, administrative office equipment & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Lease cost, factory equipment & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Indirect materials, factory & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Depreciation, factory building & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Administrative office supplies $($billing$)$ & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Administrative office salaries & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Direct materials used $($wood$,$ bolts, etc.$)$ & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Utilities, factory & & & & & & & & & & & $\backslash \backslash$

$\backslash$hline Total costs & $\backslash$$ & $0$ & $\backslash$$ & $0$ & $\backslash$$ & $0$ & $\backslash$$ & & $0$ & $\backslash$$ & $0\backslash \backslash$

$\backslash$hline

$\backslash$end$\{$tabular$\}$ Required $1$

Required $2$

Required $3$

Compute the average product cost of one patio set.

Note: Round your final answer to nearest whole dollar.

Assume production drops to only $1,000$ sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged?