Question
You are Capable of Amazing Things (YCAT) is in the process of determining how their costs behave. Cost information for the previous four months is
You are Capable of Amazing Things (YCAT) is in the process of determining how their costs behave. Cost information for the previous four months is provided below.
Month | Total Costs | Total Units |
June | $92,000 | 3,300 units |
July | $124,000 | 4,200 units |
August | $103,000 | 2,900 units |
September | $118,000 | 4,500 units |
YCAT sells each unit for an average unit selling price of $46. Their normal operations are between 2,500 and 5,000 produced units each month. Using the provided information, answer the following questions.
YCAT estimates that 5,300 units will be produced in October. Can the derived cost behavior equation be accurately used to calculate total costs? Why or why not? Please provide your answer in the box provided below.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started