cost behavior question (attached)

ParishDry cleaners has capacity to clean up to 6,000garments per month.

Requirements

1.	Complete the schedule below for the three volumes shown.
2.	Why does the average cost per garmentchange?
3.	Suppose theowner,DennisParish,erroneously uses the average cost per unit at full capacityto predict total costs at a volume of 3,000garments. Would heoverestimate or underestimatehistotalcosts? By howmuch?

E6-21A(similar to) seguesonHeIp l a Parish Diycleaners has capacity to clean up to 6,000 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, Dennis Parish, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 3,000 garments. Would he overestimate or underestimate his total costs? By how much? 3,000 4,500 6,600 Garments Garments Garments Total variable costs $ 2,700 Total xed costs Total operating costs Variable cost per garment Fixed cost per garment $ 2.20 Average cost per garment Enter any number in the edit fields and then click Check Answer. @ 2 9:3;an r yam. "J -| t l}