Acme Mailbox produces decorative mailboxes. The company's average cost per unit is $21.43 when it produces 1.100 mailboxes. Requirements 1. What is the total cost of producing 1.100 mailboxes? 2. $10,373 of the total costs are fixed, what is the variable cost of producing each mailbox? 3. Write Acme Mailbox's cost equation. 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,300 mailboxes? 5. the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,300 mailboxes? 6. What is the dollar difference between your answers to questions 4 and 5? Which approach to forecasting costs is appropriate? Why? Requirement 1. What is the total cost of producing 1.100 mailboxes? The total cost of producing 1,100 mailboxes is $ Requirement 2. If $10,373 of the total costs are foxed, what is the variable cost of producing each mailbox? The variable cost per unit is $ Requirement 3. Write Acme Mailbox's cost equation y=s +5 Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,300 mailboxes? The total cost is Acme Mailbox produces decorative mailboxes. The company's average cost per unit is $21.43 when it produces 1,100 mailboxes. Requirements 1. What is the total cost of producing 1.100 mailboxes? 2. $10,373 of the total costs are foxed, what is the variable cost of producing each malbox? 3. Write Acme Mailbox's cost equation 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,300 mailboxes? 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,300 mailboxes? 6. What is the dollar difference between your answers to questions 4 and 5? Which approach to forecasting costs is appropriate? Why? The total cost is $ Requirement 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1.300 maiboxes? The total cost is $ Requirement 6. What is the dollar difference between your answers to Questions 4 and 5? Which approach to forecasting costs is appropriate? Why? The plant manager's forecast would be $ The method, he/she is erroneously assuming that the too high these Uses the to predict costs is based on a mixed cost that will change as volume changes. If the manager uses this does not change at different volumes. The to predict costs since it correctly takes into account the variable and manager should use the foxed components of producing mailboxes
