The Cost Graphs in the Illustration Below Shows Various Types

question 194

Essay

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.

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Definitions:

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