Angry Bird produces decorative birdhouses. The company's average cost per unit is $40.00 at a production level of 2,000 birdhouses. What is the total cost of producing 2,000 birdhouses?
-If $10,000 of the costs are fixed, and the plant manager uses the average cost per unit to predict total costs, his forecast for 2,200 birdhouses will be

Question

Quizplus · Accepted Answer

The average cost per unit is $40, so for 2,000 birdhouses, the total cost is 2,000 x $40 = $80,000. If the manager uses the average cost per unit to predict costs for 2,200 birdhouses, it would be 2,200 x $40 = $88,000.

Angry Bird Produces Decorative Birdhouses