Select the graph (A through K) that best matches the numbered (1 through 6) descriptions of various cost behavior. For each graph, the vertical (y) axis represents total dollars of cost, and the horizontal (x) axis represents output units during the period. The graphs may be used more than once.
1. The cost of depreciation on a large piece of production machinery equipment where the straight-line depreciation method is used.
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2. The cost of operating a forklift to move work-in-process inventory across the factory floor where the forklift moves inventory in groups of 100 units.
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3. The cost of direct labor where the first 2,000 direct labor hours are free as a result of a grant from the local city government. After that, the direct labor cost consists of an amount that decreases after a threshold of 500 total hours is reached.
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4. The cost of inspecting finished goods inventory. Each unit is inspected by a quality expert who is paid the same amount for each unit inspected.
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5. The cost of product shipping for all output shipped in the period. The shipping cost per unit decreases with each unit shipped up to a certain number of units, at which time the shipping cost per unit remains constant.
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6. An electric car plant manufactures car batteries. Part of the manufacturing process involves the emission of toxic chemicals into the environment, which is regulated by the Environmental Protection Agency in the form of a fee assessed on a per-unit manufactured basis. The per-unit cost of complying with these regulations increases with each battery produced.
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  • CreatedSeptember 22, 2015
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