2)

Use the high-low method (Learning Objective 4) Brimfield Catering uses the high-low method to predict its total overhead costs. Past records show that total overhead cost was $25,600 when 860 hours were worked and $27,800 when 960 hours were worked. If Brimfield Catering has 885 hours scheduled for next month, what is the expected total overhead cost for next month? S6-9 ^ halth-care settina (Learning Objective 4) E6-20A Forecast costs at different volumes (Learning Objectives 1 & 2) Farnsworth Drycleaners has capacity to clean up to 7,500 garments per month. Requirements 1. Complete the following schedule for the three volumes shown 4,500 Garments 6,000 Garments 7,500 Garments Total variable costs Total fixed costs Total operating costs Variable cost per garment Fixed cost per garment Average cost per garment $4,200 $2.40 2. Why does the average cost per garment change? 3. Suppose the owner, Dustin Farnsworth, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 4,500 garments. Would he overesti- mate or underestimate his total costs? By how much