Pillard Drycleaners has capacity to clean up to 5,000 garments per month. Requirements 1. Complete the schedule below for the three volumes shown. 2. Why does the average cost per garment change? 3. Suppose the owner, Davis Pillard, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 2,000 garments. Would he overestimate or underestimate his total costs? By how much? Requirement 1. Complete the following schedule for the three volumes shown. (Round all unit costs to the nearest cent and all total costs to the nearest whole dollar.) 2,000 3,500 5,000 Garments Garments Garments Total variable costs Total fixed costs Total operating costs $ Variable cost per garment $ Fixed cost per garment Average cost per garment 1,700 $ 0.85 $ $ 2,975 $ 0.85 $ 2.00 4,250 0.85

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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.