Drycleaners has capacity to clean up to 5,500 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, , erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 2,500 garments. Would overestimate or underestimate 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

2,500 Garments 4,000 Garments 5,500 Garments

Total variable costs _________ $_____2,000________ _____________

Total fixed costs ______________ _______________ _____________

Total operating costs ______________ _________________ ________________

Variable cost per garment ___________ _________________ _ _________________

Fixed cost per garment ________________ ______$2.20______ _________________

Average cost per garment _______________ ________________ __________________