For each of the following costs, identify the cost graph that best describes its
ID: 2385036 • Letter: F
Question
For each of the following costs, identify the cost graph that best describes its cost behavior as the number of units produced and sold increases:
(a)
Sales commissions of $5,000 plus $.05 for each item sold.
(b)
Rent on warehouse of $10,000 per month.
(c)
Insurance costs of $2,500 per month.
(d)
Per-unit cost of direct labor.
(e)
Total salaries of quality control supervisors. One supervisor must be added for each additional work shift.
(f)
Total employer pension costs of $.30 per direct labor hour.
(g)
Per-unit straight-line depreciation costs.
(h)
Per-unit cost of direct materials.
(i)
Total direct materials cost.
(j)
Electricity costs of $5,000 per month plus $.0004 per kilowatt-hour.
(k)
Per-unit cost of plant superintendent's salary.
(l)
Per-unit cost of direct labor.
(m)
Repairs and maintenance costs of $3,000 for each 2,000 hours of factory machine usage.
(n)
Total direct labor cost.
(o)
Straight-line depreciation on factory equipment.
(a)
Sales commissions of $5,000 plus $.05 for each item sold.
(b)
Rent on warehouse of $10,000 per month.
(c)
Insurance costs of $2,500 per month.
(d)
Per-unit cost of direct labor.
(e)
Total salaries of quality control supervisors. One supervisor must be added for each additional work shift.
(f)
Total employer pension costs of $.30 per direct labor hour.
(g)
Per-unit straight-line depreciation costs.
(h)
Per-unit cost of direct materials.
(i)
Total direct materials cost.
(j)
Electricity costs of $5,000 per month plus $.0004 per kilowatt-hour.
(k)
Per-unit cost of plant superintendent's salary.
(l)
Per-unit cost of direct labor.
(m)
Repairs and maintenance costs of $3,000 for each 2,000 hours of factory machine usage.
(n)
Total direct labor cost.
(o)
Straight-line depreciation on factory equipment.
Explanation / Answer
a. 2, b. 3, c. 3, d. 5, e. 5, f. 2, g. 4, h. 1, i. 5, j. 2, k. 5, l. 3, m. 5, n. 3, o. 2
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