Based on the last few years of operations (when he made between 1,000 and 15,000 units), Will Jones calculated that the fixed cost of making his sole product is \($400,000\) and the variable cost per unit is \($200\).

a. If Jones expects expect to make 18,000 units, what is his expected cost in the next year using the fixed and variable costs?

b. What are two dangers of using the fixed and per-unit variable cost, as calculated, to estimate next year’s costs?