Manufacturing companies often use past data to predict future costs and profits. The reliability of...
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Accounting
Manufacturing companies often use past data to predict future costs and profits. The reliability of past data comes into play, however, given the company's mix of variable and fixed costs as well as the consistency of its selling price. If cost behavior is consistent, forecasts may be more reliable. Dashco produces and sells children's rocking chairs, distributing them to major retailers. There are minor fluctuations in the unit variable production costs due to efficiencies and pay rates of the labor force, and varying materials prices. The production department is considering the use of alternative demand-based data in its forecasts. Data containing the units sold and unit variable costs for the first three months of the year, along with amounts for total fixed overhead costs and selling, general, and administrative (SG
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