Mailbox Magic produces decorative mailboxes. The company's average cost per unit is $$21\mathrm{.}43$ ?when it produces $1,100$ ?mailboxes.

Read the requirements.

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 fixed, what is the variable cost of producing each mailbox?

The variable cost per unit is

Requirements

What is the total cost of producing $1,100$ ?mailboxes?

If $$10,373$ ?of the total costs are fixed, what is the variable cost of producing each mailbox?

Write Mailbox Magic's cost equation.

If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for $1,600$ ?mailboxes?

If the plant manager uses the cost equation to predict total costs, what would the forecast be for $1,600$ ?mailboxes?

What is the dollar difference between your answers to questions $4$ ?and $5?$ ?Which approach to forecasting costs is appropriate? Why?

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