BrightStar Inc needs to evaluate the behavior of three different costs over three months Month Units Produced Total Cost NN Cost per Unit NN Total Cost OO Cost per Unit OO Total Cost PP Cost per Unit PP 1 2,500 $5,000 $7,500 $10,000 2 5,000 $5,000 $10,000 $20,000 3 1,250 $5,000 $5,000 $5,000 Required a Calculate the cost per unit for each cost and determine whether each cost is fixed, variable, or mixed Justify your answers b Explain how understanding cost behavior can influence managerial decisions regarding production levels

Question: BrightStar Inc. needs to evaluate the behavior of three different costs over three months. Month Units Produced Total Cost NN Cost per Unit NN Total

BrightStar Inc. needs to evaluate the behavior of three different costs over three months.

Month	Units Produced	Total Cost NN	Total Cost OO	Total Cost PP
1	2,500	$5,000	$7,500	$10,000
2	5,000	$5,000	$10,000	$20,000
3	1,250	$5,000	$5,000	$5,000

Required: a. Calculate the cost per unit for each cost and determine whether each cost is fixed, variable, or mixed. Justify your answers.
b. Explain how understanding cost behavior can influence managerial decisions regarding production levels.

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