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Green Mailbox produces decorative mailboxes. The company's average cost per unit is $27.43 when it produces 1,700 mailboxes. Read the requirements. The variable cost per unit is $ 14.00 Requirement 3. Write Green Mailbox's cost equation. y = $ 14.00 x+ $ 22,831 Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,900 mailboxes? The total cost is $ 52,117 Requirement 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,900 mailboxes? The total cost is $ 49,431 Requirement 6. What is the dollar difference between your answers to Questions 4 and 5? Which approach to forecasting costs is appropriate? Why? too high if he/she uses the average cost per unit to predict costs. is based on a mixed cost that will change as volume changes. If the manager uses this The plant manager's forecast would be The method, he/she is erroneously assuming that the manager should use the cost equation fixed components of producing mailboxes. does not change at different volumes. The to predict costs since it correctly takes into account the variable and

Green Mailbox produces decorative mailboxes. The company's average cost per unit is $27.43 when it produces 1,700 mailboxes. Read the requirements. The variable cost per unit is $ 14.00 Requirement 3. Write Green Mailbox's cost equation. y = $ 14.00 x+ $ 22,831 Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,900 mailboxes? The total cost is $ 52,117 Requirement 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,900 mailboxes? The total cost is $ 49,431 Requirement 6. What is the dollar difference between your answers to Questions 4 and 5? Which approach to forecasting costs is appropriate? Why? too high if he/she uses the average cost per unit to predict costs. is based on a mixed cost that will change as volume changes. If the manager uses this The plant manager's forecast would be The method, he/she is erroneously assuming that the manager should use the cost equation fixed components of producing mailboxes. does not change at different volumes. The to predict costs since it correctly takes into account the variable and

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Green Mailbox produces decorative mailboxes. The company's average cost per unit is $27.43 when it produces 1,700 mailboxes. Read the requirements. The variable cost per unit is $ 14.00 Requirement 3. Write Green Mailbox's cost equation. y = $ 14.00 x + $ 22,831 Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,900 mailboxes? The total cost is $ 52,117 Requirement 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,900 mailboxes? The total cost is $ 49,431 Requirement 6. What is the dollar difference between your answers to Questions 4 and 5? Which approach to forecasting costs is appropriate? Why? too high if he/she uses the average cost per unit to predict costs. is based on a mixed cost that will change as volume changes. If the manager uses this The plant manager's forecast would be The method, he/she is erroneously assuming that the manager should use the cost equation fixed components of producing mailboxes. does not change at different volumes. The to predict costs since it correctly takes into account the variable and
Transcribed Image Text:Green Mailbox produces decorative mailboxes. The company's average cost per unit is $27.43 when it produces 1,700 mailboxes. Read the requirements. The variable cost per unit is $ 14.00 Requirement 3. Write Green Mailbox's cost equation. y = $ 14.00 x + $ 22,831 Requirement 4. If the plant manager uses the average cost per unit to predict total costs, what would the forecast be for 1,900 mailboxes? The total cost is $ 52,117 Requirement 5. If the plant manager uses the cost equation to predict total costs, what would the forecast be for 1,900 mailboxes? The total cost is $ 49,431 Requirement 6. What is the dollar difference between your answers to Questions 4 and 5? Which approach to forecasting costs is appropriate? Why? too high if he/she uses the average cost per unit to predict costs. is based on a mixed cost that will change as volume changes. If the manager uses this The plant manager's forecast would be The method, he/she is erroneously assuming that the manager should use the cost equation fixed components of producing mailboxes. does not change at different volumes. The to predict costs since it correctly takes into account the variable and
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