Question

Following are 12 cost behaviour graphs. The total cost is shown on the y-axis and the volume (activity) is shown on the x-axis.
For each of the following situations, identify the graph that most closely represents the cost behaviour pattern of the cost in that situation. Some graphs may be used more than once or not at all.
a. Straight-line depreciation of equipment (based on years of life)
b. Monthly electric bill, which consists of a flat monthly service charge plus $0.002 per kilowatt hour used
c. Factory rent of $3,000 per month will be forgiven by the city (which owns the building) if the company employs twelve disadvantaged youth in the month (the activity on the x-axis is the number of disadvantaged youths employed)
d. Office rent of $1,500 per month (the activity on the x-axis is sales in units)
e. Tuition is $384 per semester credit hour up to 10 credit hours; tuition for 11 credit hours or more is a flat fee of $4,215 per semester
f. Salaries of delivery workers, where a delivery person is needed for every 200 deliveries scheduled in a given month
g. The cost of direct materials for picnic tables when the wood in each table costs $45
h. Cost of water used in plant; to encourage conservation, the water company has the fol- lowing price schedule per litre of water in addition to the monthly service fee of $20:
Up to 10,000 litres................................................................... $0.005 per litre
10,001–20,000 litres................................................................ $0.006 per litre
More than 20,000 litres........................................................... $0.008 per litre
i. Cell phone bill, which is $29.99 for 450 anytime minutes in a month plus $0.25 per minute for any minutes used above the included 450 minutes
j. Assembly-line workers are paid $15.00 per hour


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  • CreatedApril 30, 2015
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