Green Mailbox produces decorative mailboxes. The company's average cost per unit is $25.43 when it produces 1,500 mailboxes. Requirements 1. What is the total cost of producing 1,500 mailboxes? 2. If $21,645 of the total costs are fixed, what is the variable cost of producing each mailbox? 3. Write Green 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 1,700 mailboxes? 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,700 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 1,500 mailboxes? The total cost of producing 1,500 mailboxes is $ Requirement 2. If $21,645 of the total costs are fixed, what is the variable cost of producing each mailbox? The variable cost per unit is $ Requirement 3. Write Green Mailbox's cost equation. y = $ X + $ Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,700 mailboxes? Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,700 mailboxes? The total cost is $ Requirement 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,700 mailboxes? 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? too high if he/she The plant manager's forecast would be $ uses the to predict costs. is based on a mixed cost that will change as volume changes. If the The manager uses this method, he/she is erroneously assuming that the does not change at different volumes. The to predict costs since it correctly takes into account the variable manager should use the and fixed components of producing mailboxes