S6-18 Identify cost behavior graph (Learning Objective 1)

Following are a series of cost behavior graphs. The total cost is shown on the vertical

(y) axis and the volume (activity) is shown on the horizontal (x) axis.

For each of the following situations, identify the graph that most closely represents the cost behavior pattern of the cost in that situation. Some graphs may be used more than once or not at all.

a. Wood costs for a chair manufacturer; the cost of direct materials per chair is $9.60

b. Customer service representatives are paid $12.75 per hour

c. Monthly vehicle lease costs for a company that pays $320 month plus $0.17 per mile for any miles driven over 1,000 per month

d. Monthly gas bill for the restaurant’s delivery vehicles; cost of gas is constant at $3.90 per gallon

e. Monthly factory equipment depreciation, straight-line method is used

f. Monthly electric cost for a florist; $50 base monthly fee plus $.006 per kilowatt used g. Total salary costs for an office; managers are paid a salary and the other workers are paid by the hour h. Oil disposal fees for an automotive maintenance company. The oil disposal fee is based on two components: a $200 base fee plus a usage fee (to encourage reduction of waste):
Up to 10 barrels.......................... $ 8 per barrel 11–25 barrels............................... $10 per barrel More than 26 barrels................... $14 per barrel i. Monthly cell phone expense for a mobile grooming business; the cell phones are billed at a rate of $40 for unlimited voice and text for each cell phone j. Monthly copier costs; the lease is $250 per month with a fee of $0.01 per copy for any copies over 100,000 copies in that month

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