1. ‘‘The concepts of short-run costs and long-run costs are relative-short run could mean a day, a month, a year, or even 10 years, depending on what you are looking at.'' Comment.
2. ‘‘My variable costs are $2 per unit. If I want to increase production from 100,000 units to 150,000 units, my total costs should go up by only $100,000.'' Comment.
3. What methods of cost estimation rely primarily on historical data? Discuss the problems an unwary user may encounter with the use of historical cost data.
4. What steps would you take to deal with a supervisor who asks you to falsify the results of your cost estimation?