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. Cell phone bill, which is $59.99 for 1,400 anytime minutes in a month plus $0.30 per minute for any minutes used above the included 1,400 minutes
b. Rent on local specialty chocolates store building of $900 per month (the activity on the x-axis is sales dollars)
c. Mortgage loan processors are paid $20.00 per hour (the activity on the x-axis is number of mortgage loans processed)
d. Tuition is $400 per semester credit hour up to 10 credit hours; tuition for 11 credit hours or more is a flat fee of $4,400 per semester
e. Factory rent of $5,000 per month will be forgiven by the city (which owns the building) if the company employs twenty displaced workers in the month (the activity on the x-axis is the number of displaced workers employed)
f. The cost of materials for salsa chips when the ingredients in each kilogram of chips cost $0.85
g. Salaries of sales team managers, where a manager is needed for every 30 salespeople employed (the activity on the x-axis is the number of sales people)
h. Straight-line depreciation of computer network; depreciation is taken over a projected five-year life
i. Cost of electricity used in plant; to encourage conservation, the electric company has the following price schedule per kilowatt hour in addition to the monthly service fee of $20:
Up to 1,000 kilowatt hours.......................................... $0.050 per kilowatt hour
1,0001–20,000 kilowatt hours..................................... $0.055 per kilowatt hour
More than 20,000 kilowatt hours................................ $0.075 per kilowatt hour
j. Monthly natural gas bill, which consists of a flat monthly service charge of $15.50 plus $13.01 per thousand cubic metre of natural gas used


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  • CreatedApril 30, 2015
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