Question

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 average cost per unit to predict total costs, his forecast for 3,000 birdcages will be

Answer 1

To predict the total costs for 3,000 birdcages:

Use the average cost per unit of $18.00 and multiply it by 3,000.
($18)(3,000)= $54,000
$54,000 is the predicted total costs of 3,000 birdcages.