Ch. 3 Homework Assignment Cost Behavior Patterns eBook Calculator Printem The graphs below represent cost behavior patterns that might occur in a company's cost structure. The vertical and represents total cost, and the horizontal axis represents activity output k. Sources. No Ch. 3 Homework Assignment Book Calculator Print item bX For each of the following situations, choose the graph from the group a-l that best illustrates the cost pattern involved. Also, for each situation, identify the driver that measures activity output 1. The cost of power when a fixed fee of $500 per month is charged plus an additional charge of $0.12 per kilowatt-hour used. f Kilowatt-hours 2. Commissions paid to sales representatives. Commissions are paid at the rate of 5 percent of sales made up to total annual sales of $500,000, and 7 percent of sales above $500,000, Sales revenues 3. A part purchased from an outside supplier costs $12 per part for the first 3,000 parts and $10 per part for all parts purchased in excess of 3,000 units. Number of parts 4. The enero al nun which a surchased in increments of 100 units (gloves come in boxes of 100 pairs). Incorrect s. The cost of tuition at a local college that charges $250 per credit hour up to 15 credit hours. Hours taken in excess of 15 are free. Number of credit hours 6. The cost of tuition at another college that charges $4,500 per semester for any course load ranging from 12 to 16 credit hours. Students taking fewer than 12 credit hours are charged $375 per credit hour. Students taking more than 16 credit hours are charged $4,500 plus $300 per credit hour in excess of 16. EV Number of credit hours 7. A beauty shop's purchase of soaking solution to remove artificial nais. Each jar of solution can soak off approximately 50 nails before losing its effectiveness Number of nails 8. Purchase of diagnostics equipment by a company for inspection of incoming orders. Number of credit hours X d 9. Use of disposable gowns by patients in a hospital Number of gowns Ch. 3 Homework Assignment eBook Calculator Printem 7. A beauty shop's purchase of soaking solution to remove artificial nails. Each jar of solution can soak off approximately 50 nails before losing its effectiveness. Number of nails 8. Purchase of diagnostics equipment by a company for inspection of incoming orders. d Number of credit hours X 9. Use of disposable gowns by patients in a na hospital h Number of gowns 10. Cost of labor at a local fast-food restaurant. Three employees are always on duty during working hours; more employees can be called in during periods of heavy demand to work on an "as- needed basis. IV Number of customers 11. A manufacturer found that the maintenance cost of its heavy machinery was tied to the age of the equipment. Experience indicated that the maintenance cost increased at an increasing rate as the equipment aged IX Age of equipment Check Wort 1. Remember the vertical axis is Total Cost, the horizontal axis is the activity output (units, patients, orders, etc). Mixed costs have both a fixed and variable cost component. 2. Variable costs vary in direct proportion to an activity cost driver 3. Variable costs vary in direct proportion to an activity cost driver. 4. Some costs follow an upward slope but in a discontinuous fashion 5. Variable costs vary in direct proportion to an activity cost driver