For Each of the Following Situations, Draw a Graph That

question 15

Essay

For each of the following situations, draw a graph that best describes the cost behaviour pattern. The vertical axis represents costs, and the horizontal axis represents volume.
a.Direct materials per unit
b.Depreciation expense on a building per unit
c.An employee paid £50 per hour with a guaranteed salary of £1,000 per week
d.A consultant paid £100 per hour with a maximum fee of £2,000
e.Salaries of teachers where each teacher can handle a maximum of 15 students

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Definitions:

Straight-line Method

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Salvage Value

The projected remaining worth of an asset upon reaching the end of its serviceable duration.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting its decrease in value over time.

Straight-line Depreciation

A method of allocating the cost of a tangible asset over its useful life evenly.