Pound Drycleaners has capacity to clean up to 7,500 garments per month.

1. Complete the schedule below for the three volumes shown.

2. Why does the average cost per garment change?

3. Suppose the owner, Dennis Pound, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 4,500 garments. Would he overestimate or underestimate his total costs? By how much?

	4,500 garments	6,000 garments	7,500 garments
total variable costs		5,400
total fixed costs
total operating costs
variable cost per garment
fixed cost per garment		$2.10
average cost per garment