Best Birdies produces ornate birdcages.The company's average cost per unit is $18.00 when it produces 2,200 birdcages.If $5,500 of the costs are fixed,and the plant manager uses the cost equation to predict total costs,his forecast for 3,000 birdcages will be

Question

Quizplus · Accepted Answer

A)
Total Cost = $18 × 2,200 = $39,600
$39,600 = Variable cost per unit (2,000 )+ $5,500
$15.50 = Variable cost per unit
then
Y = $15.50 (3,000)+ $5,500
y = $52,000

Best Birdies Produces Ornate Birdcages