Question

In: Accounting

PricePrice Drycleaners has capacity to clean up to 6 comma 0006,000 garments per month. Requirements 1....

PricePrice

Drycleaners has capacity to clean up to

6 comma 0006,000

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,

DavisDavis

PricePrice,

erroneously uses the average cost per unit at full capacity to predict total costs at a volume of

3 comma 0003,000

garments. Would

hehe

overestimate or underestimate

hishis

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.)

	3,000	4,500	6,000
	Garments	Garments	Garments
Total variable costs		$4,050
Total fixed costs
Total operating costs

Variable cost per garment
Fixed cost per garment		$1.80
Average cost per garment

Expert Solution

ekkarill92 answered 1 year ago

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