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The owner of Varsity printing, a printing company, is planning direct labor needs for the upcoming year

Accounting

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The owner of Varsity printing, a printing company, is planning direct labor needs for the upcoming year. The owner has provided you with the following information for next year’s plans:

One Color Two ColorThree color Four Color Total

Number of banners 106 137 308 349 900

Each color on the banner must be printed one at a time. Thus, for example, a four color banner will need to be run through the printing operation four separate times. The total production volume last year was 400 banners, as shown below.

One Color Two ColorThree Color Total

Number of banners 90 120 190 400

As you can see, the four-color banner is a new product offering for the upcoming year. The owner believes that the expected 500-unit increase in volume from last year means that direct labor expenses should increase by 125% (500/400). What do you think?