PricePrice Drycleaners has capacity to clean up to 6 comma 0006,000 garments per month. Requirements...
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Accounting
PricePrice
Drycleaners has capacity to clean up to
6 comma 0006,000
garments per month.
Requirements
1.
Complete the schedule below for the three volumes shown.
2.
Why does the average cost per garment change?
3.
Suppose the owner,
DavisDavis
PricePrice,
erroneously uses the average cost per unit at full capacity to predict total costs at a volume of
3 comma 0003,000
garments. Would
hehe
overestimate or underestimate
hishis
total costs? By how much?
Requirement 1. Complete the following schedule for the three volumes shown. (Round all unit costs to the nearest cent and all total costs to the nearest whole dollar.)
3,000
4,500
6,000
Garments
Garments
Garments
Total variable costs
$4,050
Total fixed costs
Total operating costs
Variable cost per garment
Fixed cost per garment
$1.80
Average cost per garment
Answer & Explanation
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