Requirement 2 options: fixed/variable Fixed variable increases/decreases increases/decreases/ stays the same

Requirement 3 options overestimate/ under estimate

Pound Drycleaners has capacity to clean up to 6,000 garments per month. Requirements 1. Complete the schedule below for the three volumes shown. 2. Why does the average cost per garment change? 3. Suppose the owner, Doug Pound, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 3,000 garments. Would he overestimate or underestimate his total costs? By how much? ... 3,000 4,500 6,000 Garments Garments Garments Total variable costs $ 2,700 Total fixed costs Total operating costs Variable cost per garment $ 1.80 Fixed cost per garment Average cost per garment Requirement 2. Why does the average cost per garment change? The average cost per garment changes as volume changes, due to the V component of the dry cleaner's costs. The V cost per unit decreases as volume while the variable cost per unit Requirement 2. Why does the average cost per garment change? The average cost per garment changes as volume changes, due to the component of the dry cleaner's costs. The cost per unit decreases as volume while the variable cost per unit Requirement 3. Suppose the owner, Doug Pound, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 3,000 garments. Would he overestimate or underestimate his total costs? By how much? He would his costs by