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Q. Garner Organization requires its marketing managers to submit estimated cost behaviour data on all requests for new products or expansions of a product line. Judy Oslo is a new manager. Her calculations show a fixed cost for a new project at $100,000 and a variable cost of $5 per unit. Based on these calculations, the low-volume project would not be profitable. She shares her dismay with Nina Smyth, another manager. Nina strongly advises her to revise her estimates. She points out which several of the costs which had been classified as fixed costs could be considered variable, since they are mixed costs. When the data has been revised classifying those costs as variable costs, the project appears viable
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