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Requirement 2 . Suppose that, in August 2 0 2 0 , production was 1 1 0 million units of Supreme, 1 5 0 million

Requirement 2. Suppose that, in August 2020, production was 110 million units of Supreme, 150 million units of Deluxe, and 170 million units of Regular. Why might the July 2020 information on manufacturing cost per unit be misleading when predicting total manufacturing costs in August 2020?During July 2020, the company incurred $ 170 million of manufacturing overhead costs, which includes a $ 170 million fixed cost component that will fluctuate with changes in monthly production volume. This amount, which has been allocated to the total manufacturing costs of producing each product, affects the total manufacturing cost per unit amounts as calculated in requirement 1.

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