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The cost graphs in the illustration below shows various types of cost behaviors. For each of the following costs, identify the cost graph that best describes its cost behavior as the number of units produced and sold increases:
a) Sales commissions of $6,000 plus $0.05 for each item sold.
b) Rent on warehouse of $12,000 per month.
c) Insurance costs of $2,500 per month.
d) Per-unit cost of direct labor.
e) Total salaries of quality control supervisors. One supervisor must be added for each additional work shift.
f) Total employer pension costs of $0.35 per direct labor hour.
g) Per-unit straight-line depreciation costs.
h) Per-unit cost of direct materials.
i) Total direct materials cost.
j) Electricity costs of $5,000 per month plus $0.0004 per kilowatt-hour.
k) Per-unit cost of plant superintendent's salary.
l) Salary of the night-time security guard of $3,800 per month.
m) Repairs and maintenance costs of $3,000 for each 2,000 hours of factory machine usage.
n) Total direct labor cost.
o) Straight-line depreciation on factory equipment.
Real GDP
Refers to the total economic output of a country, adjusted for price changes or inflation, measured in constant prices.
Government Purchases
These are expenditures made by government entities for goods and services that directly satisfy public needs or are used to produce other goods and services for public consumption.
Per Capita GDP
The measure of a country's economic output per person, calculated by dividing the Gross Domestic Product by the total population.
Upper Volta
The former name of the West African country now known as Burkina Faso, until it was renamed in 1984.
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