If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,900 mailboxes? 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,900 mailboxes? 6. What is the dollar difference between your answers to questions 4 and 5? Which approach to forecasting costs is appropriate? Why?
If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,900 mailboxes? 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,900 mailboxes? 6. What is the dollar difference between your answers to questions 4 and 5? Which approach to forecasting costs is appropriate? Why?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for
1,900
mailboxes?5.
If the plant manager uses the cost equation to predict total costs, what would the forecast be for
1,900
mailboxes?6.
What is the dollar difference between your answers to questions 4 and 5? Which approach to forecasting costs is appropriate? Why?
Transcribed Image Text:Green Mailbox produces decorative mailboxes. The company's average cost per unit is $27.43 when it produces 1,700 mailboxes.
Read the requirements.
Requirement 1. What is the total cost of producing 1,700 mailboxes?
The total cost of producing 1,700 mailboxes is $
Requirement 2. If $22,831 of the total costs are fixed, what is the variable cost of producing each mailbox?
The variable cost per unit is
Requirement 3. Write Green Mailbox's cost equation.
y =
$14.00
X +
$22.831
$14.00
(...)
46,631
Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,900 mailboxes?
The total cost is
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