Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

just the last part thank you . req 3! Pastore Drycleaners has capacity to clean up to 5.000 garments per month Requirements 1. Complete the

just the last part thank you . req 3!
image text in transcribed
image text in transcribed
Pastore Drycleaners has capacity to clean up to 5.000 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, David Pastore, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 2,000 garments. Would he overestimate or underestimate his 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) 2,000 Garments 1,000 $ 8,400 3,500 5.000 Garments Garments 1,750 $ 2,500 8,400 8,400 Total variable costs Total fixed costs Total operating costs 9,400 $ 10,150 $ 10,000 Variable cost per garments 0.50 $ 0.50 $ 0.50 Fixed cost per garment 4.20 $ 2.40 1.68 Average cost per garment 4.70 $ 2.905 2.18 Requirement 2. Why does the average cost per garment change? The average cost per garment changes as volume changes, due to the fixed component of the dry cleaner's costs. The fixed cost per unit decreases as volume increases, while the variable cost per unit remains constant Requirement 3. Suppose the owner, David Pastore, erroneously uses the average cost per unit at Pull capacity to predict total costs at a volume of 2,000 garments Would he overestimate or underestimate his total costs? By how much? He would underestimate his costs by 2000 Requirement 3. Suppose the owner, David Pastore, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 2,000 garments Would he overestimate or underestimate his total costs? By how much? underestimate his costs by He would 2000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial accounting

Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin

1st edition

471467855, 978-0471467854

More Books

Students also viewed these Accounting questions