Question: E6-43B Use unit cost data to forecast total costs (Learning Objective 2) Nokias earphone production line reported the average production cost per unit of $10.00

E6-43B Use unit cost data to forecast total costs (Learning Objective 2)

Nokia’s earphone production line reported the average production cost per unit of

$10.00 when it produced 2,000 units of earphones last month.

Requirements 1. What is the total cost of producing 2,000 units of earphones?

2. If the variable cost per unit produced is $6.00, what is the total fixed cost of production?

3. Write the cost equation for Nokia’s earphones.
4. Assuming the plant produced 2,200 units of earphones in the coming month, what would be the forecasted total production cost using the average cost per unit in the calculation?
5. Assuming the plant produced 2,200 units of earphones in the coming month, what would be the forecasted total production cost using the cost equation in the calculation?
6. Are your answers in requirements 4 and 5 different? Which forecast cost is more accurate? Why?

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