Answer questions 1-4 based on all the information provided.

Exhibit 2 Monthly Product and Cost Summary Product Lines Monthly production Valves 7,500 units (1 run) 7,500 units (1 shipment) Pumps 12,500 units (5 runs) 12,500 units 7 shipments) Flow Controllers 4,000 units (10 runs) 4,000 units (22 shipments) Monthly shipments Manufacturing Costs Material 2 $2 - $4 2 6 -12 3 @ $2 $6 2 7-14 4 $1 S 4 5 2-10 1@8= -8 $22 Total material 16 $20 $458,000 Labor ($16 per hour including employee benefits) Set-up labor 168 hours 8 hours per production run 25 hours per unit .50 hours per unit 40 hours per unit 50 hours per unit .50 hours per unit .20 hours per unit 8 hours per production run 12 hours per production run Run labor Machine usage Manufacturing Overhead Receiving Materials handling Engineering Packing and shipping Maintenance Total Machine depreciation (units-of-production method) $25 per hour of use 9,725 hours 10,800 hours $ 20,000 200,000 100,000 60,000 30,000 $410,000 $270,000