Sketch cost graphs for the following situations:
a. A 30 percent increase in fixed costs will enable Donelan Company to produce up to 75 percent more. Variable costs per unit will remain unchanged.
b. Refer to part a. What if Donelan Company’s variable costs per unit triple for the additional units it intends to produce?
c. Richmond’s variable marketing costs per unit decline as more units are sold.
d. Anderson Paper pays a flat fixed charge per month for electricity plus an additional rate of $0.20 per unit for all consumption over the first 2,000 units.
e. Indirect labor costs at KMD Bank consist only of supervisors’ salaries. The bank needs
one supervisor for every 20 clerks.
f. National Plastics currently operates close to capacity. A short-run increase in production would result in increasing unit costs for every additional unit produced.