Resource Consulting Is Studying the Costs of Several Clients, and Has

question 21

Essay

Resource Consulting is studying the costs of several clients, and has found graphs of cost behaviour patterns would appear as follows:
1. A straight line that gradually slopes upward to the right
2. A curvilinear line that gradually slopes upward to the right
3. A straight line that is parallel to the graph's horizontal axis
4. A straight line that gradually slopes downward to the right
5. A curvilinear line that gradually slopes downward to the right
6. A straight line that gradually slopes upward to the right and then, at a specific point, flattens out to run parallel to the horizontal axis
7. A series of straight lines that appear to resemble a set of steps
8. A straight line that runs parallel to the graph's horizontal axis and then, at a specific point, drops to a lower level
Unless told otherwise, assume that the horizontal axis represents total activity and the vertical axis represents total cost.
Required:
For items A-F below, indicate the number of the graph that best represents the cost behaviour pattern described. Note: Graphs can be used more than once, and not all graphs need be used.
$\begin{array} { l l } 15,000 \text { to } 29,999 \text { units } & \$ 5 \text { per unit } \\30,000 \text { to } 44,999 \text { units } & \$ 6 \text { per unit } \\45,000 \text { to } 59,999 \text { units } & \$ 7 \text { per unit }\end{array}$

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Definitions:

Product Variety

The range of different products or services offered by a company to meet various customer needs and preferences.

Distribution Network

A system of warehouses, transport services, and distribution centers that facilitates the movement of products from manufacturers to consumers.

Manufacturer

A company or individual that produces finished goods from raw materials using various processes, tools, and machinery.

Economies Of Scale

The cost advantage achieved by an increase in production, leading to a lower cost per unit.