Case 1-26 (Algo) Cost Classification and Cost Behavior [LO1-1, LO1-2, LO1-3, LO1-4] 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 4,200 sets per year. Annual cost data at full capacity follow: Direct labor 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 (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory $ 86,000 $ 99,000 $ 72,000 $ 19,000 $ 59,000 $ 6,000 $ 2,000 $ 15,000 $ 19,000 $ 104,000 $ 4,000 $ 113,000 $ 429,000 $ 46,000 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 that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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.) Cost Item Direct labor dvertising actory supervision 'roperty taxes, factory building iales commissions nsurance, factory Depreciation, administrative office equipment ease cost, factory equipment direct materials, factory Depreciation, factory building dministrative office supplies (billing) dministrative office salaries Direct materials used (wood, bolts, etc.). Itilities, factory otal costs Cost Behavior Variable Fixed Period (Selling Product Cost or Administrative) Cost Direct Indirect $ 0 $ 0 $ 0 $ 0 $ 0