Exercises: Set A

$27.$ Identifying Cost Behavior. Mining, Inc., is trying to identify the cost behavior of the three costs shown. Cost information is provided for six months.

$\backslash$table$[[$Month$,\backslash$table$[[$Units$],[$Produced$]],$Cost $1,$Cost $2,$Cost $3],[\backslash$table$[[$Total$],[$Costs$]],\backslash$table$[[$Cost per$],[$Unit$]],\backslash$table$[[$Total$],[$Costs$]],\backslash$table$[[$Cost per$],[$Unit$]],\backslash$table$[[$Total$],[$Costs$]],\backslash$table$[[$Cost per$],[$Unit$]]],[1,8,000,$$$10,000,,$$$24,000,,$$$32,000,-],[2,10,000,10,000,,29,000,,40,000,],[3,12,000,10,000,,33,600,,48,000,$L$],[4,14,000,10,000,,36,400,,56,000,],[5,16,000,10,000,4_{?},38,400,,64,000,],[6,18,000,10,000,$D$,39,600,4_{?},72,000,-]]$

Required:

a$.$ Calculate the cost per unit, and then identify how the cost behaves $($fixed$,$ variable, or mixed$)$ for each of the three costs. Explain the reasoning behind your answers.

b$.$ Why is it important to identify how costs behave with changes in activity?