Question

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 4,100 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 $ 86,000 101,000 $ 67,000 $ 15,000 $ 56,000 $ 7,000 $ 3,000 14,000 $ 20,000 106,000 $ 5,000 105,000 s 435,000 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 1Required 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.) Period (Selling or Administrative) Cost Cost Behavio Product Cost Cost Item Variable Fixed Direct Indirect 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 Total costs Required 1 Required 2 >

Complete this question by entering your answers in the tabs below. Required 1 Required Required 3 Required 2Required 3 Compute the average product cost of one patio set. (Round your final answer to nearest whole dollar.) Average product cost per set Required 1 Required 3>

Complete this question by entering your answers in the tabs below. Required 1Required 2 Required 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? Increase Decrease ORemain unchanged Required 2 Required3

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Average product Cost = $194.15 per set

Requirement 1: Cost behavior (S Variable Period (Selling or Product cost (S) Cost item Fixed administrative) cost (S)Direct Indirect Direct labor Advertisin Factory Supervision Pro Sales Commission Insurance, facto Depreciation, administrative office equipment Lease cost, factory Equipment Indirect materials, factory Depreciation, factory Building Administratve oftice supplies (billing Administrative office salaries Direct Materials used (wood, bolts, etc Utilities, factory Total Cost 86000 86000 101000 67000 15000 101000 67000 15000 Taxcs, factory Buildin 56000 56000 7000 3000 14000 7000 3000 14000 20000 106000 20000 106000 5000 5000 105000 105000 435000 46000 648000 435000 46000 275000 418000 270000 521000 Created by Universal Document ConverterRequirement 2: S.No. Particulars Direct product cost Indirect product Cost Total product cost Amount (S) 521000 275000 796000 Production Capacity Average product cost - Total Product Cost Average product cost $796000 4100 Average product cost $194.15 per set Requirement 3: The average product cost per set would be increased. This is because the fixed costs would be sprcad over fewer units, causing the average cost per unit Created by Universal Document Converter

Add a comment
Know the answer?
Add Answer to:
The Dorilane Company produces a set of wood patio furniture consisting of a table and four...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • The Dorilane Company produces a set of wood patio furniture consisting of a table and four...

    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: 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,...

  • The Dorilane Company produces a set of wood patio furniture consisting of a table and four...

    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 3,800 sets per year. Annual cost data at full capacity follow: Direct labor $ 88,000 Advertising $ 102,000 Factory supervision $ 75,000 Property taxes, factory building $ 16,000 Sales commissions $ 60,000 Insurance, factory $ 7,000 Depreciation, administrative office equipment $ 2,000 Lease cost, factory equipment $ 19,000 Indirect materials,...

  • The Dorilane Company produces a set of wood patio furniture consisting of a table and four...

    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 4,100 sets per year. Annual cost data at full capacity follow: Direct labor $ 92,000 Advertising $ 103,000 Factory supervision $ 73,000 Property taxes, factory building $ 20,000 Sales commissions $ 55,000 Insurance, factory $ 6,000 Depreciation, administrative office equipment $ 2,000 Lease cost, factory equipment $ 15,000 Indirect materials,...

  • The Dorilane Company produces a set of wood patio furniture consisting of a table and four...

    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: Direct labor $ 85,000 Advertising $ 101,000 Factory supervision $ 65,000 Property taxes, factory building $ 21,000 Sales commissions $ 55,000 Insurance, factory $ 8,000 Depreciation, administrative office equipment $ 2,000 Lease cost, factory equipment $ 16,000 Indirect materials,...

  • The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table...

    The Dorilane 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 labor $ 91,000      Advertising $ 98,000      Factory supervision $ 75,000      Property taxes, factory building $ 21,000      Sales commissions $ 61,000      Insurance, factory $...

  • The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table...

    The Dorilane 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 4,100 sets per year. Annual cost data at full capacity follow: Direct labor $ 94,000 Advertising $ 105,000 Factory supervision $ 68,000 Property taxes, factory building $ 22,000 Sales commissions $ 56,000 Insurance, factory $ 7,000 Depreciation, administrative office equipment $...

  • The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The s...

    The Dorilane 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 labor $ 94,000 Advertising $ 95,000 Factory supervision $ 68,000 Property taxes, factory building $ 19,000 Sales commissions $ 61,000 Insurance, factory $ 7,000 Depreciation, administrative office equipment $...

  • The D Company produces a wood patio furniture set consisting of a table and four chairs. he compa...

    The D Company produces a wood patio furniture set consisting of a table and four chairs. he company has enough customer demand to justify producing its full capacity of 3,800 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 92,000 $101,000 $ 70,000 S 17,000...

  • The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table...

    The Dorilane 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 3,900 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...

  • The Outdoor Dining Company specializes in producing a set of wood patio furniture consisting of a...

    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: BOK ences 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...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT